Weight rises to a new four-year high as it approaches territory 47: $ 1

On Friday, the peso rose to a new four-year high near the limit of 47 per dollar, bolstered by the improvement in the equity market and the reduction in the trade deficit. Data from the Philippine Bankers Association showed the peso closed at 48.06 per dollar on Friday, stronger than its close of 48.115 per dollar on Thursday. It was the strongest level for the local currency since it closed at 47.99 against the dollar on September 23, 2016. Sales volume reached $ 783 million on Friday, also down from $ 575 million on Thursday. Bangko Sentral ng Pilipinas Governor Benjamin Diokno said that amid the COVID-19 crisis, the peso remained stable and was one of the strongest currencies in the region. “The strength of the Philippine peso is a reflection of our strong macroeconomic fundamentals, which was achieved through years of strong structural and economic reforms,” ​​he said. Diokno expressed optimism that the economy will recover in the coming months from the impact of natural calamities and the COVID-19 pandemic this year. He said that as restrictions were slowly lifted and economic sectors gradually reopened, “the BSP expects the Philippine economy to recover and grow from 6.5 to 7.5 percent in 2021 and 2022.” “In fact, we have been through difficult times. However, there are signs that the economy is on the way to recovery, ”Diokno said in an online forum. The economy contracted 10 percent in the first three quarters amid the pandemic, after 21 years of uninterrupted growth. Diokno mentioned some signs pointing to an economic recovery, including stable inflation that stayed within the government’s target range of 2% to 4% and averaged 2.5% in the first 10 months. He said that even with the huge financing requirements to mitigate the effects of the pandemic, the debt profile of the economy remained manageable. “While the Philippines’ debt-to-GDP ratio increased to 48% at the end of June 2020, it is still lower than the debt-to-GDP ratio that the country recorded during the 2004 fiscal crisis, which was 72%.” he said. The country’s total external debt rose to only 24 percent of gross domestic product at the end of June, a large part of which is in the form of medium- and long-term loans, according to the BSP governor. He cited the growth in net inflows of foreign direct investment that increased since May, registering a year-on-year expansion of 46.9 percent in August. FDI is expected to grow 5.6 percent this year and 7.0 percent next. Filipinos’ personal remittances abroad registered 9.1 percent year-on-year growth in September, as recipient economies began to reopen. “From a previously projected 5 percent contraction, the year-to-date contraction was only 1.4 percent; The full-year contraction is estimated at just 2.0 percent. Next year, we forecast that remittances will recover to 4.0 percent, ”he said. Diokno pointed to the record of gross international reserves of $ 103.8 billion, equivalent to 10.3 months of imports of goods and payment of services and primary income, which was higher than the traditional doctrine of 3 months of imports. He said the banking system remained resilient as the banking system’s delinquency rate remained manageable at 3.6 percent at the end of September. He said that to put things in perspective, the delinquency rate during the Asian financial crisis was in the double digits. The banks were also well capitalized, with capital adequacy ratios above the BSP regulatory requirement of 10 percent and the Bank for International Settlements standard of 8 percent.