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Peso slips as OPEC cuts output

Peso slips as OPEC cuts output

THE PESO inched down on Thursday as the Organization of the Petroleum Exporting Countries agreed to cut output to support oil prices. — BW FILE PHOTO

THE PESO slipped versus the dollar on Thursday after oil exporting countries announced an output cut, fanning inflation concerns.

The local unit closed at P58.653 against the greenback on Thursday, inching down from its P58.65 finish on Wednesday, Bankers Association of the Philippines data showed.

The peso opened Thursday’s trading session at P58.70 per dollar. Its weakest showing for the day was at P58.73, while its intraday best was at P58.54 against the greenback.

Dollars traded declined to $756.05 million on Thursday from the $861.15 recorded on Wednesday.

“The peso weakened due to inflationary concerns after OPEC (Organization of the Petroleum Exporting Countries) announced cuts in oil production quotas,” a trader said in an e-mail.

The OPEC agreed to slash production by about 2 million barrels per day, the largest reduction since 2020.

The peso also depreciated after the marginal pick up in the Philippines’ unemployment rate, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

The ranks of jobless Filipinos went up 79,000 month on month in August, bringing the total unemployed that month to 2.681 million, preliminary data from the Philippine Statistics Authority showed.

This translated to an unemployment rate of 5.3%, rising from 5.2% in July but lower than 8.1% in August last year.

However, the peso’s depreciation was offset by data showing that soured loans held by banks eased in August, Mr. Ricafort added.

The Philippine banking industry’s bad loans fell for a sixth straight month in August, bringing the nonperforming loan (NPL) ratio to a 23-month low amid the economy’s continued reopening.

Latest data from the central bank showed the banking sector’s gross NPL ratio inched down to 3.53% as of end-August from 3.57% as of end-July and 4.51% in the same month last year.      

For Friday, the trader said the peso may weaken further on expectations of strong US jobs data.

The trader expects the peso to move within P58.55 to P58.75 on Friday, while Mr. Ricafort gave a forecast range of P58.50 and P58.70 per dollar. — K.B. Ta-asan

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