THE economic team remains “very bullish” that the peso will continue to strengthen against the dollar in the coming months.
In a Development Budget Coordination Committee (DBCC) briefing on Monday, the economic team said the peso is expected to average P53 to P57 to the dollar this year until the President ends his term in 2028.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco Dakila Jr. said the peso is already trading below the P58 to the dollar average in the third quarter of last year, a trend expected to continue this year.
“It’s very difficult to give a forecast but I will say that there are factors that argue that the peso is going to be broadly stable over the medium term,” Dakila said during the briefing.
Data from the Bankers Association of the Philippines (BAP) showed the peso has improved its performance against the US dollar and closed at P55.77 on Monday.
The data showed the peso traded at a low of P55.75 and a high of P56.01 to the dollar. At the start of the trading day, the peso opened at P55.95, slightly lower than the P56.02 close last Thursday.
Dakila said government’s optimism that the performance of the peso will improve stems from the expected increase in services exports, which he explained is a significant source of dollars for the Philippines.
Another is tourism revenue, which Dakila said, is one of the sectors of the economy that is also expected to see robust growth this year. Tourism is also among the top dollar-earning industries.
“We’re actually very bullish for this year. We’re expecting about an 80-percent increase in receipts from tourism. Also, Overseas Filipino remittances are expected to be stable at about 3 percent growth this year and BPO receipts are expected to grow by about 9 percent so those are structural sources of foreign exchange,” Dakila explained.
Growth in remittances from Filipinos abroad slowed to 2.4 percent in February, the slowest in seven months, according to the latest BSP data.
BSP data showed this was the slowest since July 2022 when remittances posted a year-on-year growth of 2.3 percent. In the first two months of the year, cash remittances grew 3 percent.
The level of cash remittances also reached P2.569 billion, the lowest level since May 2022 when remittances amounted to P2.425 billion. In the January to February period, remittances amounted to P5.331 billion.
BSP traced the slight expansion in cash remittances in February 2023 to the growth in receipts from land- and sea-based workers.
On a year-to-date basis, cash remittances coursed through banks in January-February 2023 amounted to $5.33 billion, up by 3 percent from $5.18 billion recorded in the same period a year-ago.
The growth in cash remittances from the United States, Saudi Arabia, Singapore and Qatar contributed mainly to the increase in remittances in January-February 2023.
Meanwhile, in terms of country sources, the US posted the highest share of overall remittances during the period, followed by Singapore, Saudi Arabia and Japan.
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