Peso Shrugs Off Diokno's Comments

USD/PHP happy to continue trading sideways just above the PHP48.00 mark. The rate last sits at PHP48.07, virtually unchanged on the day, as the peso has paid little attention to the most recent comments from BSP Gov Diokno.

• Mr Diokno noted that targeted fiscal measures are critical to stimulating economic growth albeit the central bank has ample monetary space, while a slower pace of GDP contraction likely continued in Q4. Diokno said that the central bank will ensure smooth normalisation of time-bound supportive measures if circumstances warrant policy recalibration, adding that the BSP is optimistic about foreign remittances.
• In addition, Diokno said that the BSP approved the gov't request for a PHP540bn interest-free loan. The gov't repaid an equivalent loan to the central bank last month.
• A break above Dec 22 high of PHP48.13 would allow bulls to take aim at the 50-DMA at PHP48.22. Conversely, bears need a dip through the key PHP48.00 figure before targeting Oct 20 low of PHP47.95.
• Looking ahead, the Philippines will release November trade report on Friday.