Some analysts predict that in 2018 the peso could weaken to 55 to 1 against the US Dollar.
The Philippine Peso continues to lose strength against the US Dollar. The dollar reached the over 50-1 exchange rate against the peso two days in a row this week.
WHY THE DECLINE IN THE PHILIPPINE PESO?
- “The peso depreciated again primarily because of safe-haven buying amid weak economic data from China and Japan as well as the decline in oil prices overnight,” a trader interviewed said.
- Another trader said: “We continue to see investors favoring the safety of the dollar amid all the uncertainties and market volatility. It’s just general risk aversion and we tracked the movement of most Asians and emerging market currencies that also closed weaker [yesterday] on lingering concern about a glut in the global crude supply,” the trader added.
- There might be a slight bias in favor of the dollar, as expectations of weak Japanese trade report and soft Chinese inflation could again fuel safe-haven buying. “Weak Japanese trade data could further aggravate global growth concerns, potentially resulting in safe-haven buying…”
- BSP Deputy Governor and officer in charge Diwa Guinigundo also attributed the weakening of the peso against the dollar to the strong demand for dollars from corporations. This drove the peso to touch the 50 to a dollar level according to Guinigundo. (BSP, Bangko Sentral ng Pilipinas, is the central bank of the Philippines that has propped up the peso against the dollar in the past.)
LOWEST LEVEL FOR PHP IN OVER 10 YEARS
Currently, the exchange rate stands at 50.22 PHP to 1 USD as this post goes to publication.
These recent figures are the peso’s weakest level since the peso closed at 50.09 to $1 on Nov. 15, 2006.
This drove the peso to touch the 50 to a dollar level,” Guinigundo said.
The peso shed 5.2 percent, making it the worst performing currency in Southeast Asia last year.
The demand for the greenback throughout the week pressured the local currency.
The peso could weaken to P51 to the dollar next year and P55 in 2018, as policy tightening in the US drives funds out of emerging markets like the Philippines, according to a late December 2017 report on ABS-CBN News.
(Sources: Business World Online , PhilStar.Global, ABS-CBN News.com
When we arrived in the Philippines in July 2009, the exchange rate was 48.01 as reported on this website almost six years ago.
Several years ago the rate dropped to below 41 to 1. In that article I noted that some analysts predicted that the exchange rate would be PHP 37.50 to $1 in 2011 and PHP 35.50 in 2012.
Those dire predictions never materialized.
But look, the current forecasts are promising. It might be a good time to check out my e-book, The Philippines Expat Advisor, and discover how you can move to the Philippines faster and cheaper.
I know we’re certainly enjoying the extra money in our pockets with the current rates.