SGD/PHP Outlook: Likely to increase, as the rate is above its recent average and near recent highs, supported by Singapore's strong economic performance.
Key drivers:
• Rate gap: The Monetary Authority of Singapore's shift towards a more accommodative policy contrasts with the Bangko Sentral ng Pilipinas's potential rate cuts, affecting the attractiveness of the SGD against the PHP.
• Risk/commodities: Continued pressure on the peso due to weak growth prospects could hinder its strength, while Singapore benefits from stable economic fundamentals.
• One macro factor: The Philippine balance of payments deficit poses challenges for the peso, making it more vulnerable to fluctuations.
Range: SGD/PHP is likely to hold within its recent range but could test new highs given current support.
What could change it:
• Upside risk: A sudden improvement in Singapore's economic indicators could strengthen the SGD further.
• Downside risk: Unexpected geopolitical events or significant tariff changes affecting trade relations could negatively impact the PHP.
