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Covid Curbs Relaxed, Off'ls Express Optimism Around Growth Targets

PHP

Spot USD/PHP operates -0.101 at PHP50.589 as we type, after the Philippines announced the loosening of some Covid-19 countermeasures, while top economic officials argued that the Philippines can meet its growth targets this year.

  • Losses past Oct 8 low/50-DMA at PHP50.385/50.339 would please bears, while bulls look to a jump above the round figure/Sep 27 high of PHP51.000/51.036.
  • USD/PHP 1-month NDF trades flat at PHP50.730. Topside focus falls on Sep 27 high of PHP51.520, downside focus falls on Oct 7 low/50-DMA at PHP50.490/50.473.
  • The Presidential Palace announced that the Philippines is relaxing some restrictions on activity. The national Covid-19 task force authorised lowering the Alert Level in Metro Manila by one notch to Level 3 from Oct 16, which entails looser guidelines for businesses. The decision came as OCTA Research Group said they registered a "very fast" decline in cases in Metro Manila. In addition, the government ditched quarantine requirements for vaccinated travellers from low-risk territories.
  • BSP Gov Diokno played down the recent downgrade to the IMF's GDP projection for the Philippines and said that the central bank remains optimistic about growth targets. Diokno reiterated that rate-setters will keep monetary policy settings accommodative to allow recovery to gain traction.
  • Elsewhere, FinSec Dominguez said that GDP expansion likely slowed in Q3 after a 11.8% Y/Y expansion recorded in Q2, but insisted that the gov't is sticking to its GDP growth target this year. Dominguez noted that the inflation target will hold if crude oil prices remain below $90/barrel. He added that the Philippines' FX reserves will be helpful if the peso faces headwinds.

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