USD/PHP: Gradual weakness in Philippine Peso – MUFG

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6 October 2023

USD/PHP: Gradual weakness in Philippine Peso – MUFG

In September, the Philippine Peso was volatile against the US Dollar. Economists at MUFG Bank analyze USD/PHP outlook.

Risks PHP come from oil, rice and the US Dollar

We forecast gradual weakness in PHP against the US Dollar at 57.30 in 3M and 57.50 in 12M.

While we continue to note upside risks on global oil and rice prices, we do see some areas of support for PHP, which is reflected in our forecast for gradual weakness in the FX. First, BSP has intervened more aggressively and turned more hawkish. Second, the current account deficit should narrow slightly. Third, FDI flows should also pick up in 2024. Lastly, we still expect inflation to trend lower.

Risks to our PHP forecasts come from oil, rice and the US Dollar.

USD/PHP – Q4 2023 57.30 Q1 2024 57.50 Q2 2024 57.50 Q3 2024 57.50

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