The peso fell to a new 11-year low against the US dollar Wednesday amid high corporate demand for the greenback and concerns over the widening trade deficit and the ban on workers deployment to Kuwait.
The peso lost P0.14 Wednesday to close at 52.12 a dollar, its weakest level in more than 11 years since it settled at 52.165 a dollar on July 21, 2006. Volume turnover reached $939.9 million, lower than $1.023 billion on Tuesday.
Emilio Neri Jr., the lead economist of Bank of the Philippine Islands, said earlier the dollar “remained well-bid with corporates securing the greenback.”
“I also think that there are lingering concerns on Middle East remittances falling after the Kuwait decision and trade gap widening further in 2018,” Neri said.
The Philippine Statistics Authority said last week the country’s balance of trade in goods deficit widened 63 percent to a record $4.02 billion in December 2017 from $2.47 billion a year ago on surging imports and lower exports.
Data showed that total exports in December dropped 4.9 percent to $4.72 billion from $4.97 billion in December 2016, its first decline since November 2016. Imports increased 17.6 percent to $8.74 billion from $7.43 billion a year earlier.
The country’s balance of trade in goods deficit also widened to $29.786 billion in the whole of 2017 from $26.702-billion deficit in 2016.
Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. downplayed the weakness of the peso, saying the “economy is actually in very good shape.”
“Just too much fretting about isolated issues. We should not lose the big picture,” Espenilla said in a statement.
Espenilla said earlier the local currency would remain resilient, supported by the country’s solid macroeconomic fundamentals.
He said the peso was not expected to melt down because the underlying economic fundamentals of the economy were healthy.
The peso hit an all-time low of 56.45 a dollar in August 2004.