The market bias for the SGD to PHP exchange rate appears to be range-bound in the near term.
Key drivers influencing this trend include the interest rate differential between the Monetary Authority of Singapore's stable policy stance and the recent rate cut by the Bangko Sentral ng Pilipinas. This dynamic creates downward pressure on the peso. Additionally, Singapore's stronger-than-expected economic growth, particularly in manufacturing and exports, supports the SGD. Meanwhile, inflation expectations in Singapore suggest moderation but lift concerns about potential future increases.
The near-term trading range for SGD to PHP is likely to remain stable within a narrow band given recent patterns.
An upside risk could arise from a rebound in investor confidence in the Philippines, driven by governance reforms. Conversely, a downside risk is the potential continuation of monetary easing in both Singapore and the Philippines, which may further weaken the peso against the Singapore dollar.