THE PESO weakened against the greenback on Wednesday as the government reported a wider budget deficit in September.
The local unit closed at P56.85 per dollar on Wednesday, down by nine centavos from its P56.76 finish on Tuesday, based on data from the Bankers Association of the Philippines.
The peso opened the session slightly stronger at P56.75 per dollar, which was also its intraday best. Its weakest showing was at P56.875 against the greenback.
Dollars exchanged went down to $909.7 million on Wednesday from $1.06 billion on Tuesday.
The peso weakened following the release of September fiscal balance data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Data from the Bureau of the Treasury released on Wednesday showed the budget deficit widened by 39.6% to P250.9 billion in September from P179.8 billion in the same month a year ago.
In the first nine months, the government’s budget deficit narrowed by 2.89% to P983.5 billion from P1.01 trillion in the same period a year ago.
Mr. Ricafort said concerns over inflation risks amid the conflict in the Middle East also led to the depreciation of the peso against the dollar.
Still, the peso remains “stable” against the dollar amid recent hawkish signals from the Bangko Sentral ng Pilipinas (BSP) chief, he added.
BSP Governor Eli M. Remolona, Jr. on Tuesday said the Monetary Board is considering an off-cycle rate increase this week or next, before their scheduled policy meeting on Nov. 16, to anchor inflation expectations.
The central bank has maintained a hawkish stance in recent months and has kept the benchmark interest rate at a near 16-year high of 6.25% since March after it raised borrowing costs by 425 basis points from May 2022 to March 2023 to tame inflation.
“The peso weakened amid global growth concerns following the downbeat European manufacturing PMI (purchasing managers’ index) reports,” a trader said in a Viber message.
For Thursday, the peso may decline further against the dollar ahead of a likely strong third-quarter US economic growth report.
Mr. Ricafort and the trader gave a forecast range of P56.75 to P56.95 per dollar for Thursday. — Keisha B. Ta-asan