Peso Struggles For Gains As Perceived Chance Of Outsized BSP Hike Dwindles

Spot USD/PHP oscillates around neutral levels, last sits +0.032 at PHP54.105. Topside focus falls on PHP54.435, which capped gains on Oct 4, 2018. Bears look for a retreat past the nearest round figures.

• USD/PHP 1-month NDF last -0.050 at PHP54.220. Bears look for a dip through Jun 15 low of PHP53.330, while bulls keep an eye on yesterday's high of PHP54.270, followed by Oct 4, 2018 high of PHP54.800.
• President-elect Marcos announced he will double as Agriculture Secretary responsible for food output amid rising costs of living. It is a rare thing for a sitting President to hold a ministerial portfolio, last practiced when President Estrada took the helm of the Interior Ministry in 1998.
• Elsewhere, Marcos is looking to address fuel costs. He expressed preference for targeted oil subsidies over the suspension of the excise tax and said he will seek deals with oil-producing nations to cushion the blow from higher prices to consumers.
• Bangko Sentral ng Pilipinas is set to raise interest rates on Thursday, but consensus is split about the magnitude of the hike. Most expect a 25bp move, but a considerable minority still anticipates a 50bp rate rise.
• Yesterday's comments from incoming BSP chief Medalla decreased the odds of an outsized hike. The official said that a 25bp hike was "most likely" in light of the central bank's philosophy of "gradualism."