Peso slides further to new 8-yr low

The peso further slid to a fresh almost eight-year low Thursday as the US dollar—considered a safe haven by investors amid uncertainty—remained strong even as the government announced that the economy grew at a better-than-expected pace in the third quarter.

The domestic currency weakened to 49.56:$1 from 49.35:$1 last Wednesday. Thursday’s close was the weakest since Nov. 24, 2008’s 49.83:$1.

At the Philippine Dealing System, the peso reached an intraday low of 49.56:$1 and a high of 49.22:$1 after opening at 49.36:$1.

The total volume traded jumped to $821.5 million from Wednesday’s $666.5 million.

“The peso continued to fall with the chances for a Fed rate hike increasing in reaction to Fed comments overnight. Investors now turn their attention to Janet Yellen’s speech in the US Congress,” a trader from a foreign bank said.

The government also on Thursday reported that the country posted a gross domestic product (GDP) growth of 7.1 percent during the first three months of the Duterte administration.

The GDP expansion in the third quarter was the fastest since the 7.5-percent growth recorded in the second quarter of 2013.

The Philippine economy grew faster than most of its Asian neighbors such as China, Vietnam, Indonesia and Malaysia during the July to September period.

Hot money

A net inflow in foreign portfolio investments was posted in October following favorable economic outlook released by a debt watcher that month alongside sustained demand for government securities, the Bangko Sentral ng Pilipinas also reported.

Data released Thursday showed that the $59.87-million net inflow of “hot money” last month was higher than the $27.84 million a year ago. It also reversed the net outflow of $807.15 million in September.

A net inflow meant more hot money entered the country. A net outflow is the reverse.

In October, inflows worth $1.633 billion exceeded the $1.573-billion outflows.

The hot money inflow last month was higher than September’s $1.274 billion but lower than the $1.647 billion in the same month last year.

The BSP attributed the higher foreign portfolio investment to the “brighter growth projections by Moody’s Investors Service for the Philippines, in recognition of the country’s sound macroeconomic and fiscal fundamentals, coupled with renewed investor interest in peso government securities.”