Peso Falters After BSP Reiterates Pledge To Maintain Accommodative Stance

Spot USD/PHP gapped higher at the re-open and last operates +0.170 at PHP51.405, bringing key resistance from PHP51.500 back into view. Bears look for losses past Feb 23 low of PHP51.105 towards Feb 3/Jan 5 lows of PHP50.920/50.900.

• USD/PHP 1-month NDF last +0.060 at PHP51.520. Topside focus falls on Feb 21/8 highs of PHP51.750/51.780, while bears keep an eye on Feb 23 low of PHP51.110.
• Worth noting that BSP Gov Diokno said yesterday that the central bank will "maintain its accommodative policy stance given a manageable inflation environment and emerging uncertainty surrounding domestic and global growth prospects."
• The budget deficit widened to a record PHP1.67tn in 2021 (or 8.61% of GDP). Meanwhile, the government said they expect that the economy will gain PHP9.4bn each week amid the relaxation of Covid-19 curbs across the country.
• The Philippines' producer price index rose 4.1% Y/Y in January, according to the latest update from the PSA, a sharp acceleration from December's 0.6% increase. As a reminder, CPI inflation data for the month of February will be published on Friday.