Peso ends lower on weak Q1 GDP growth – BusinessWorld Online
THE PESO weakened anew against the dollar on Thursday due to slower-than-expected Philippine economic growth last quarter.
The local unit closed at P55.625 per dollar, declining by 22.9 centavos from its P55.396 finish on Wednesday, Bankers Association of the Philippines data showed.
The peso opened Thursday’s session weaker at P55.50 against the dollar. It dropped to as low as P55.675, while its intraday best was at just P55.46 versus the greenback.
Dollars exchanged went down to $1.7 billion on Thursday from $2.07 billion on Wednesday.
The peso depreciated following weaker-than-expected Philippine gross domestic product (GDP) data, a trader said in a phone interview.
The Philippine economy expanded by 5.4% in the first quarter, slightly faster than the 5.3% growth in the prior three-month period but slower than the 5.9% pace in the same quarter last year.
This was also below the 5.8% median forecast of 15 economists in a BusinessWorld poll conducted last week and the government’s 6-8% growth target band for the year.
The peso was also dragged down by data showing that the National Government’s (NG) debt reached a fresh peak at end-March, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The NG’s outstanding debt hit a new record high of P16.68 trillion as of March, Treasury data showed.
This was equivalent to 62% of GDP, above the 60.7% recorded at end-2024. This was the highest debt-to-GDP ratio seen since the 65.7% in 2005.
The threshold considered by multilateral lenders to be manageable for developing economies is 60%.
Under its Medium-Term Fiscal Framework, the government seeks to bring the debt-to-GDP ratio down to 60.4% by the end of 2025 and to 56.9% by 2028.
For Friday, the trader expects the peso to move between P55.40 and P55.80 per dollar, while Mr. Ricafort said it could range from P55.50 to P55.70. — A.M.C. Sy
