ANZ flags limits to peso rebound

The peso may struggle to regain stronger ground in the coming months as the Philippines faces weaker growth prospects, a deeper monetary easing cycle and a challenging external position, according to ANZ Research.

- By KEISHA TA-ASAN

In a report, ANZ said the peso has moderately strengthened after recovering from its record-low close of 59.13 to the dollar on Oct. 28. However, depreciation pressures on the currency could remain.

“In the Philippines, weak growth prospects, a deeper than initially anticipated monetary easing cycle and a challenging external position are likely to limit peso strength,” ANZ said.

“The central bank’s communication that it allows the exchange rate to be determined by market forces is an additional deterrent,” it said.

ANZ pointed to governance issues in flood control projects, citing government estimates that approximately 70 percent of the funds allocated to flood-control projects over the past two years were unaccounted for.