THE Manila-based unit of Dutch financial giant ING Bank expects the peso to weaken to 51.50 per dollar by the end of 2018 due to a wider trade deficit .
ING Bank Manila senior economist Joey Cuyegkeng said in a report Tuesday the local currency was likely to weaken this year after posting 49.81 at the close of 2017.
“... We had revised our Philippine peso forecast to a milder weakness of 51.50 by year-end. This is slightly weaker than the latest Bloomberg consensus forecast of 50.80. The weak external payment position is likely to resurface as a reason,” Cuyegkeng said.
Cuyegkeng cited the latest Bangko Sentral ng Pilipinas forecast that showed that current account would deteriorate to a deficit of $700 million this year.
“We expect the trade deficit to widen to show a worsening capacity of OFW remittances to finance the trade gap. We expect remittances to grow by 4 percent this year to $29.2 billion.