Marcos economic team expects peso to end 2022 at ₱54-₱55 vs dollar

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Metro Manila (CNN Philippines, December 5) — The peso will likely sustain its path to recovery for the rest of the year after coming off its record low of close to ₱59 per dollar, according to new assumptions made by the Marcos economic team.

At the conclusion of its periodic review on Monday, the interagency Development Budget Coordination Committee or DBCC now expects the dollar-peso exchange rate to settle within the ₱54 to ₱55 range by the end of 2022.

That new estimate is weaker than the ₱51 to ₱53 exchange rate forecast the panel announced during its July meeting.

Still, with the peso seen to cap 2022 at ₱55 against the greenback at worst, that will be a better finish than the ₱58.99 it hit in October, its worst performance in history.

The economic team, however, has penciled in further peso weakness next year with the exchange rate forecast range set at ₱55 to ₱59 per dollar before recovering to a firmer ₱53 to ₱57-to-the dollar territory from 2024 to 2028.

A weak peso makes imports more expensive and consequently stokes inflation, especially imported oil.

The DBCC has revised the imports and inflation numbers for 2022.

Goods bought from overseas could grow by as much as 20% this year, a tad faster than the 18% pace the economic team last projected in July.

The rise in consumer prices is now expected to vault to an average 5.8% by end-2022, faster than the initial 4.5% to 5.5% inflation forecast band.

The DBCC has kept its economic growth goal unchanged at an average 7%, the midpoint of its target range of 6.5% to 7.5%.