Peso In Demand As Philippine Economy Defies Covid Countermeasures

The Philippine peso has caught a bid following the release of blowout Q3 GDP data. The economy grew 7.1% Y/Y in the third quarter, beating consensus forecast of +4.9% by a considerable margin, while the reading for Q2 was revised higher to +12.0%. Quarterly growth registered at +3.8% Q/Q, comfortably above all estimates in BBG survey of analysts. The data were rather upbeat despite strict Covid-19 restrictions implemented by the gov't to contain a deadly wave of infections.

• The Philippine Statistics Authority listed wholesale and retail trade, repair of motor vehicles and motorcycles, manufacturing and construction as the main contributors to overall growth. Economic Planning Sec Chua noted that the Philippines is on track to hit its 2021 GDP growth target.
• Spot USD/PHP has retreated under its 100-DMA and the psychological PHP50.000 figure, it last sits -0.210 at PHP49.965. Downside focus falls on Sep 16 low of PHP49.715 and a break here would open up Aug 31/Sep 3 lows of PHP49.660/49.659. Conversely, a rebound above PHP50.620, which capped gains on Nov 4 & 5, would give bulls some reprieve.
• USD/PHP 1-month NDF last seen -0.150 at PHP50.050. Bears look to a move through Sep 15 low of PHP49.730, while bulls would be pleased by a jump above Nov 3 & 4 highs of PHP50.920.