The peso on Friday gained five centavos to end the year at 49.93 to $1 even as the domestic currency hit 11-year lows in the middle of the year as the market was jittery on an expected worsening of the current-account deficit.
The peso’s close at end-2017 was also weaker than its close of 49.72 to $1 on Dec. 29, 2016, last year’s last trading day.
It was nonetheless the strongest close since 49.91 to a greenback on June 19 and quashed market expectations that the peso would end 2017 beyond 50 to $1 level.
At the Philippine Dealing System, the peso reached an intraday high of 49.89 and a low of 50.01 after opening at 49.90 to $1.
The total volume traded rose to $742.2 million from $625.3 million last Thursday.
A trader at a local bank attributed the stronger peso to “offshore flows (as the Philippine Stock Exchange hit an all-time high), although the Bangko Sentral ng Pilipinas might have been in the market to rebuild its gross international reserves.”
BSP Governor Nestor A. Espenilla Jr. earlier said the peso strengthened due to the combination of strong remittance and equity inflows as well as US dollar softness over the uncertainty on the impact of US tax legislation.
Also, “domestic fundamentals remain attractive, lately reinforced by the Train’s approval,” Espenilla said, referring to Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion Act.
President Duterte last week signed into law package 1A of the Train, which starting January next year will slash and restructure personal income tax rates that stayed the same for two decades, while also jacking up or slapping new taxes on consumption of oil, cigarettes, sugary drinks and vehicles. —BEN O. DE VERA