The peso emerged anew as one of the best performing currencies in the region for the second straight year, gaining more than five percent despite the onslaught of the COVID-19 pandemic.
The peso gained two pesos and centavos last year, closing at its strongest level in more than four years at 48 pesos and two centavos to the US dollar from the end- 2019 level of 50 pesos and 63 centavos. This was the strongest level for the peso since closing at 47.99 to the dollar on September 23, 2016.
Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines, attributed the strengthening of the peso to the collapse of imports due to the impact of the pandemic on global trade.
Security Bank chief economist Robert Dan Roces said the peso may weaken back to 50 pesos to the dollar by the end of this year on improved global trade translating to a wider trade deficit. Roces also cited the expansionary policy of US president-elect Joe Biden.