Economic growth and the peso-dollar exchange rate

How much a US dollar costs in pesos can influence the growth trajectory of the country. Then again, it is just one factor, and there are parts of the economy that are showing some bright spots.

In "1Q 2024 PH GDP Report: Economy expands at a moderate pace", we identify the sources of growth and where we lag. The peso-dollar exchange rate is also a concern, and our foreign exchange head delivers his riff on the peso's trajectory this year in our article, "Peso may weaken further against the US dollar, but effects may be muted".

Finally, we share our little victory in "Metrobank’s fund management expertise earns accolades from CFA Society Philippines".

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Metrobank Wealth Insights Team

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1Q 2024 PH GDP Report: Economy expands at a moderate pace

The Philippines’ Gross Domestic Product (GDP) for the first quarter grew at a faster pace by 5.7% year-on-year (YoY) versus the 5.5% growth recorded in the 4th quarter of 2023 as elevated inflation and the high interest rate environment dampened the growth in consumer spending and investment spending. The latest quarterly GDP print came out lower than the 5.9% Bloomberg consensus estimate, though above our forecast of 5.6%.

According to National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan, the moderation in economic activity, especially on household consumption was due to the effects of the El Ni?o phenomenon, which consequently affected the growth in the services sector. He also cited the lower business confidence for the first quarter, stemming mainly from the above mentioned downside risks to growth.

Read more: 1Q 2024 PH GDP Report: Economy expands at a moderate pace

Peso may weaken further against the US dollar, but effects may be muted

By the end of the 2nd quarter or early 3rd quarter of 2024, a US dollar may be worth PHP 58 or higher.

Armand Barlis, Head of Metrobank’s Foreign Exchange Division, said import season is fast approaching and a host of factors, such the risk of delays in the US Federal Reserve’s decision to cut interest rates, will likely push the dollar temporarily higher, similar to the peak we saw in 2022.

Read more: Peso may weaken further against the US dollar, but effects may be muted

Metrobank’s fund management expertise earns accolades from CFA Society Philippines

The CFA Society Philippines recognized Metrobank for its fund management expertise in its recently concluded 9th annual Best Managed Funds of the Year Awards for 2024.

The program sought to raise awareness of the best funds in the country by recognizing professionally managed funds that have delivered the highest risk-adjusted returns compared to peers.

Read more: Metrobank’s fund management expertise earns accolades from CFA Society Philippines

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