Peso weakens amid corruption probe

Japanese financial giant MUFG Bank Ltd. said the unearthing of flood control scandals has started to weigh on the Philippine peso, which weakened through last week and lagged behind other Asian currencies.

- DERCO ROSAL

While the peso traded against the United States (US) dollar “within a reasonable range,” it still “underperformed regional Asian currencies to some extent,” MUFG Global Markets Research senior currency analyst Michael Wan said in a Sept. 12 report.

In particular, the local currency closed at P57.1:$1 on the last trading day of last week, but it still slipped about 0.4 percent against the greenback over the course of the week.

“This contrasts with many other Asian currencies which strengthened against the dollar on the back of a weaker dollar and improved sentiment towards China’s risk assets,” Wan said.

“While we don’t think this is a key driver right now, one key domestic factor to watch for in the Philippines now is the recent corruption issues around flood control projects,” Wan added. As such, political risks from these issues need monitoring for possible shifts, he said.