Peso weakens on wider Feb. deficit, tighter restrictions
THE PESO retreated versus the greenback on Tuesday due to cautious sentiment after the release of data showing a wider budget deficit in February and renewed restriction measures in more parts of the country as coronavirus infections continue to rise.
The local unit finished trading at P48.545 per dollar on Tuesday, weakening by 13 centavos from its P48.415 close on Monday, data from the Bankers Association of the Philippines showed.
The peso opened the session at P48.42 versus the dollar. Its weakest point was at P48.555 while its intraday best was at P48.41 against the greenback.
Dollars exchanged increased to $770.67 million yesterday from $576.4 million on Monday.
The peso weakened due to risk-off sentiment following the wider budget deficit recorded in February, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.
Preliminary data released by the Bureau of the Treasury on Tuesday showed the budget deficit stood at P116 billion in February, 208% more than the P37.6-billion gap seen a year earlier and 728% higher than the P14-billion deficit in January.
Faster spending compared with the growth in revenues caused the surge in the budget deficit, the Treasury said.
Meanwhile, the announcement of new restriction measures for other areas of the country also affected the peso, a trader said in an e-mail.
President Rodrigo R. Duterte on Monday night announced that Quirino province will be placed under modified enhanced community quarantine from April 1 to 15, while Santiago City in Isabela will be under the same lockdown classification for the whole April.
Meanwhile, Cagayan, Isabela, Nueva Vizcaya, Batangas, Tacloban City, Iligan City, Davao City, Lanao del Sur, and the entire Cordillera Administrative Region will be under a general community quarantine in April.
Metro Manila and surrounding provinces Cavite, Laguna, Rizal, and Bulacan are under the tightest lockdown measures from March 29 to April 4 to prevent further spread of the virus.
COVID-19 cases increased by 9,296 on Tuesday to bring the total to 741,181 infections. Active cases were at 124,680.
For Wednesday, Mr. Ricafort gave a forecast range of P48.50 to P48.60 while the trader expects the local unit to move within P48.45 to P48.65 per dollar. — L.W.T. Noble