Peso sinks to weakest in 12 years

MANILA, Philippines — The peso retreated yesterday, closing to its lowest in almost 12 years at 52.95 to $1 due to uncertainties caused by the recent developments in the G7 meeting, analysts said.

The local currency weakened by 25 centavos from last Friday’s close of 52.70 to $1. This was the lowest since the peso closed at 52.98 on July 3, 2006.

It opened at 52.80 to $1, lower compared to the 52.58 recorded the last  week. Total volume reached $653.10 million, lower than Friday’s $724.20 million.

Emilio Neri, chief economist at the Bank of the Philippine Islands (BPI), said the peso weakened due in part to uncertainties on global trade after President Donald Trump backed out of the G7 joint communique.

“It’s partly reflecting uncertainties about the fate of the global trading system following the G7 developments over the weekend,” Neri said.

“The rapid widening of the Philippine trade gap, dwindling gross international reserves of the Bangko Sentral ng Pilipinas and the variance in our interest policy versus the US all point to the need for the Philippine peso to become more competitive against the dollar,” he said.

The country’s trade gap more than doubled to $3.62 billion last April from the $1.55 billion recorded in the same month last year.

Meanwhile, the country’s foreign exchange reserves thinned for the second straight month last May, reaching $78.97 billion compared to the April level of $79.61 billion.