Peso climbs as budget gap narrows

BW FILE PHOTO

THE PESO strengthened versus the greenback for the second straight day as the government’s budget gap narrowed on the back of improved revenues.

The local unit closed at P52.12 per dollar on Wednesday, gaining 13 centavos from its P52.25 finish on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened Wednesday’s session at P52.35 against the dollar. Its weakest showing was at P52.375, while its intraday best was at P52.10 versus the greenback.

Dollars exchanged increased to $ 1.654 billion on Wednesday from $ 1.498 billion on Tuesday.

The peso appreciated following the release of the government’s budget balance data, which showed the fiscal gap narrowed in March, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Data released by the Bureau of the Treasury on Wednesday showed the government’s budget deficit narrowed by 1.97% to P187.67 billion in March from P191.4 billion a year earlier.

The fiscal gap narrowed as revenue collections grew by 35.96%, outpacing the 18.14% increase in government expenditures.

Meanwhile, a trader in an email attributed the peso’s appreciation to global demand concerns amid lockdowns in Beijing due to rising coronavirus disease 2019 (COVID-19) cases.

Millions of people in Beijing took their second COVID-19 tests of the week on Wednesday as the Chinese capital tried to keep an outbreak numbering in the dozens from spiraling into a crisis like the one the locked-down city of Shanghai is enduring.

In total, 20 million of Beijing’s 22 million will be tested three times this week.

Data showed six of Shanghai’s 16 districts had zero cases outside quarantined areas, with numbers in seven others in the single digits. In total, Shanghai detected 171 such cases on Tuesday, down from Monday’s 217.

Shanghai reported 48 new deaths on Tuesday, down from 52 the day before, taking the city’s official death tally since April 17 to 238.

For Thursday, both Mr. Ricafort and the trader gave a forecast range of P52 to P52.20 per dollar. – LWT Noble with Reuters

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