Japanese financial giant MUFG Bank Ltd. said investors have turned pessimistic following heightened political risks, but the relative strength of the Philippine peso is buoying sentiment.

“Political risks are escalating as street protests call for President Ferdinand Marcos Jr.’s resignation over a corruption scandal linked to publicly funded flood mitigation projects,” Lloyd Chan, MUFG Senior Currency Analyst, wrote in a Dec. 1 commentary.

Chan noted that investor sentiment has “deteriorated, but the 59 level for the United States (US) dollar-peso remains a key resistance for now.”

The relative strength of the local currency, following its recent plunge to its weakest levels, could have made goods imports cheaper in late November.

Economic think tank Moody’s Analytics projected consumer price movements to have “cooled” to 1.5 percent last month, down from the 1.7 percent actual inflation rate in October.

Reyes Tacandong & Co. Senior Adviser Jonathan Ravelas also anticipates a 1.5 percent inflation rate in November, “as softer food prices and tempered demand offset energy cost pressures.”

Germany-based Deutsche Bank, meanwhile, forecast inflation had steadied at 1.7 percent, below the market consensus of 1.9 percent. All forecasts fall within the Bangko Sentral ng Pilipinas’ (BSP) projection range of 1.1 percent to 1.9 percent.

If November’s actual inflation clocks in within the central bank’s projection, it will continue the below-two-percent streak the country has seen since the 2.1 percent rate in February. The government’s consumer price target is two percent to four percent.

Ravelas said lower inflation signals “continued disinflationary momentum, giving the BSP room to maintain an accommodative stance and possibly cut rates further to support growth.”

The BSP maintained its accommodative stance, though it sounded less dovish than when the flood control graft cases first erupted.

According to the Philippine Statistics Authority (PSA), the country’s gross domestic product (GDP) growth slowed “sharper than expected” in the third quarter at four percent, the economy’s slowest expansion in four and a half years.

Such weakness in output growth, coupled with cooling inflation, activates a green light for the BSP to continue trimming the current key monetary policy rate of 4.75 percent, according to United Overseas Bank (UOB).

The Singaporean bank expects the economic data to “strengthen the case” for an additional 25 basis points (bps) in interest rate cuts, bringing the rate to 4.5 percent by year-end.