SGD/PHP Outlook:
Slightly weaker, but likely to move sideways as the rate is below its recent average and near recent lows, with no clear driver evident.
Key drivers:
• Rate gap: The Monetary Authority of Singapore maintains a more accommodative stance, while the Bangko Sentral ng Pilipinas is considering rate cuts, negatively impacting the peso.
• Risk/commodities: Oil prices remain volatile, which can affect both currencies; a drop in oil prices typically pressures the peso due to its trade balance.
• One macro factor: The Philippine peso is under pressure amid speculation of weakening economic performance and public concerns over corruption affecting spending.
Range:
The SGD/PHP is likely to hold steady within its recent 3-month range, given the current market dynamics.
What could change it:
• Upside risk: A surprising increase in economic growth in Singapore could strengthen the SGD against PHP.
• Downside risk: Heightened fears of instability in the Philippines may lead the peso to weaken further.