Peso Comes Under Pressure As Government Downgrades Growth Outlook

Spot USD/PHP has tested the PHP56.000 mark this morning as the Philippines revised the official growth forecast lower, while data showed that the unemployment rate ticked higher.

• When this is being typed, spot USD/PHP trades +0.147 at PHP55.840. Should we get above PHP56.000, bulls could target a cluster of intraday highs from Sep 2005 located around PHP56.350. Bears keep an eye on Jun 29 low of PHP54.600.
• USD/PHP 1-month NDF last seen -0.030 at PHP55.950. Topside focus falls on PHP56.580, which capped gains on two days in Sep 2005. Bears eye PHP54.740, the low print of Jun 28, for initial support.
• New FinSec Diokno clarified Pres Marcos' remark that inflation "is not that high." Diokno said that his boss was referring to the full-year reading, which is around +4.4% Y/Y. Diokno also said that the economy will likely grow at a more modest clip than previously expected, as officials lowered the 2022 forecast range to +6.5%-7.5% Y/Y from +7.0%-8.0%.
• The unemployment rate in the Philippines climbed to 6.0% in May from 5.7% recorded in April, as participation widened to 64.0% from 63.4%. The quality of jobs deteriorated, as the underemployment rate edged higher to 14.5% from 14.0%.