THE PESO weakened anew against the dollar on Monday, halting a five-day rally, after net inflows of foreign direct investments (FDI) fell to their lowest in 11 years in December and lingering concerns over the Trump administration’s trade policies.
The local unit closed at P57.41 per dollar on Monday, weakening by 20.4 centavos from its P57.206 finish on Friday, Bankers Association of the Philippines data showed.
The peso opened Monday’s trading session weaker at P57.25 against the dollar. Its intraday best was at P57.20, while its worst showing was at P57.43 versus the greenback.
Dollars exchanged sank to $815.69 million from $1.84 billion on Friday.
Weak FDI data released on Monday caused the peso to decline against the dollar, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Net inflows of FDI fell to its lowest level in over a decade in December, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed. FDI net inflows slumped by 85.2% to $110 million in December from $743 million in the same month in 2023.
This was the lowest net inflow in 11 years or since the $102.16 million in December 2013.
Still, for the full year, FDI net inflows edged up to $8.93 billion in 2024 from $8.925 billion in 2023, halting two consecutive years of annual declines. This was just a tad below the BSP’s forecast of $9 billion in net FDI inflows for 2024.
“The peso closed lower on the back of a strong dollar on risk-off sentiment due to the tariff war and fears of an economic slowdown after the lower-than-expected NFP (nonfarm payrolls) last Friday,” a trader added in a phone interview.
The dollar was trading near its lowest level in four months against major currencies on Monday as concerns over a global trade war troubled investors, lifting safe havens, Reuters reported.
Markets have been fixated on trade tensions as US President Donald J. Trump slapped tariffs on top trading partners only to delay some of them for a month amid growing signs and fears of a US economic slowdown.
That has led to investors losing faith in the US economy which has been outperforming its peers. On currency futures markets, investors have slashed net long dollar positions to $15.3 billion from a nine-year high of $35.2 billion in January.
The dollar index, which measures the US currency against six others, was last at 103.83 on Monday, stuck near a four-month low touched last week.
The dollar fell more than 3% last week against major rivals, clocking its weakest weekly performance since November 2022 as investors fret about tariffs and its impact on the economy.
Adding to investor jitters, Mr. Trump in a Fox News interview on Sunday declined to predict whether the US could face a recession amid stock market concerns about his tariff actions on Mexico, Canada and China.
Investors were also digesting data from Friday that showed US job growth picked up in February, but cracks are emerging in the once-resilient labor market amid a chaotic trade policy. Nonfarm payrolls increased by 151,000 jobs last month after rising by a downwardly revised 125,000 in January, the Labor department’s Bureau of Labor Statistics said. Economists polled by Reuters had forecast payrolls advancing by 160,000 jobs after a previously reported 143,000 gain in January.
For Tuesday, the trader expects the peso to move between P57.10 and P57.50 per dollar, while Mr. Ricafort sees it ranging from P57.30 and P57.50. — Aaron Michael C. Sy with Reuters
