The Philippine peso fell this week by the most in two months, leading losses among Asian currencies, on concern record oil prices will quicken inflation and slow economic growth.
The peso slid for a sixth week after Economic Planning Secretary Augusto Santos said GDP growth in the first quarter probably slowed to as little as 5.2 percent because inflation at a three-year high restrained consumer spending. Oil prices reached US$135.09, double what they were a year ago.
South Korea’s won and Indonesia’s rupiah also slumped on demand for dollars to fund oil imports.
“Inflation is definitely weighing on the economic outlook not just in the first quarter but for the rest of the year,” said Vishnu Varathan, a regional economist at Forecast Singapore PTE. “That’s adding to the peso’s weakness.”
The peso fell 1.5 percent this week to 43.465 per dollar in Manila, according to the Bankers Association of the Philippines, the most since the five days ended March 14. The won dropped 0.7 percent to 1,047.65 and the rupiah declined for a third week, to 9,313.
The Philippine economy may grow 6 percent in the first quarter, the slowest pace in six quarters, a survey compiled by Bloomberg News showed before a government report on May 29. Growth was 7.4 percent in the final quarter of last year.
Central bank Deputy Governor Diwa Guinigundo said this week the economy “will definitely suffer” if oil prices remain above US$125 a barrel. The country imports almost all of its fuel needs.
The won fell to 1,057.40 on May 21, the lowest since October 2005, on concern oil prices will increase the nation’s import bill and slow economic growth. South Korea imports almost all of its oil needs and reported a fourth consecutive current-account deficit in March.
Indonesia’s rupiah fell after Indonesian Energy Minister Purnomo Yusgiantoro said the government will raise domestic fuel prices by an average 29 percent to reduce its subsidies, prompting protests from students and labor unions.
Malaysia’s ringgit pared a weekly gain after the government said it will also cut subsidies within two months. The ringgit traded at 3.2175 per US dollar in Kuala Lumpur for a 0.5 percent gain on the week, according to Bloomberg data, ending a four-week slump.
Elsewhere, the New Taiwan dollar gained 0.5 percent in the five days to NT$30.5, halting a four-week slide. Thailand’s baht advanced 0.7 percent to 32.06 against the US currency, while the Vietnamese dong fell for a third week to trade at 16,199.