Manila:The Philippine peso has the potential to strengthen by the end of 2026, driven by seasonal increases in remittances and domestic demand, according to an economist.

According to Philippines News Agency, Michael Ricafort, chief economist at Rizal Commercial Banking Corporation, indicated that the uptick in local and export market sales in the last quarter of the year could support the local currency against the US dollar. Ricafort highlighted that the seasonal rise in overseas Filipino workers' remittances, export sales, and other US dollar earnings converted to pesos in the fourth quarter, particularly for Christmas-related spending, would aid the peso.

Data from the Bangko Sentral ng Pilipinas showed that December recorded the highest OFW remittances in 2023. Ricafort noted that US dollar sales and earnings from business process outsourcing and export firms for wages and holiday disbursements also contribute to bolstering the peso.

Additionally, Ricafort mentioned the Central Bank's interventions in the foreign exchange market to manage extreme volatility, as well as foreign exchange inflows from securities and bond investments, as factors benefiting the Philippine peso. Recently, the local currency touched the 64 level against the US dollar, influenced by domestic economic outlooks, central bank rate decisions, and high inflation rates. However, it has since recovered to the 62 level but is currently trading at the 63 level. It opened Thursday's trading at 63.25, slightly weaker than the previous session's 63.15, which was also the closing rate of the prior session.