Peso averages at 5.4% vs dollar in 1st half
MANILA – Investors’ risk aversion and renewed appetite towards emerging markets helped boost the Philippine currency as it appreciated by 5.4 percent against the US dollar in the first half of 2010.
Bangko Sentral ng Pilipinas Department of Economics Statistics Director Rosabel Guerrero, in a briefing, said the local unit averaged at 45.77 to a dollar from January to June this year, better than the 47.8 to a dollar it registered same period last year.
“Remittances from Filipinos abroad also lifted the peso,” she said.
Inflows from Overseas Filipinos expanded by 7.1 percent year-on-year last July after it amounted to $10.7 billion.
Monetary officials eye an eight percent growth for remittances this year from last year’s $17.3 billion.
This growth forecast already materialized last January when inflows rose by 8.5 percent when inflows totaled to nearly $1.4 billion. The eight percent growth level was again registered in June and July although the highest cumulative year-on-year expansion stood at 8.5 percent last January.
However, the all-time high inflows for remittances was achieved last June when it totaled to $1.62 billion.
Monetary officials attributed this robust growth to the continued strong demand for overseas Filipino workers as global recovery continue despite questions about the path of the US economy as well as the ongoing sovereign debt crisis in some parts of Europe.
They continue to see strong flows to continue in the coming months but is also open that inflows could have reached its peak because of base effect.
Last Wednesday, the peso closed to its highest in more than two years at 43.88 to a dollar, which analysts traced to risk aversion and the decision of the US Federal Reserve to maintain its policy rates to near-zero level.
Wednesday’s closing is near the 43.75 to a dollar level it registered in June 2008.
Analysts see the local unit ending at 43 level this year and Wednesday’s closing is the second time this year that it reached this level.
The peso first touched the 43 to a dollar level this year last September 13 but retreated and closed to 44 level after the trading.*PNA
