Peso seen to hit P58 against $1 according to London Research due to following reasons

A London-based economic research sees Philippine peso to further fall to P58 against US dollar next year while peso to continue to slide to Php55 against US dollar this year.

According to Capital Economic  report titled "Peso plunges, Korea's labor market woes continue" published on September 14, peso is seen to continue to weaken due to wider trade deficit, primarily brought by importation of iron and steel shipments for the administration's infrastructure program.

"The lesson from previous natural disasters is that there is likely to be a short-term negative impact on gross domestic product, followed by a rebound supported by reconstruction efforts. Perhaps a bigger worry from an economic perspective is that 'Mangkhut' damages agricultural production, leading to an increase in food prices. This would put further pressure on the Bangko Sentral ng Pilipinas to tighten monetary policy," Capital Economic said.

The latest government data showed as of July 2018, deficit widened to a $22.49 billion, 72.3% larger than the $13.06 billion recorded during the first seven months of the last year.

 A trade deficit occurs when a country's import is higher than exports.  Last Friday, Bangko Sentral ng Pilipinas reported that the current account deficit climbed to $3.1 billion an equivalent to 1.9% of GDP.

The government's Build, Build, Build program is estimated to spend up to P9 trillion for 75 major projects until 2022.


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