The peso may continue to appreciate steadily over the next 12 months as it is more stable than it seems, keeping the Philippines the “favorite destination” of investors in Asia excluding Japan, according to DBS Group.
The financial services provider said in its latest quarterly global research that the local currency could appreciate continually through the next four quarters to trade at P39:$1 by the first quarter of 2014.
“The peso is more stable than the strong currency (the Philippine) stock market makes it out to be,” DBS said. As of March 15, the peso traded 40.62 against the dollar. DBS said this would improve to 40.10 in the second quarter, 39.70 in the third quarter, 39.30 in the fourth quarter and 39 in the first quarter of 2014.
“Since the 2008 global crisis, Philippine equities consistently outperformed the MSCI AXJ (Morgan Stanley Capital International—Asia excluding Japan) index by a wide margin,” it added.
The Singapore-based bank said that the all-time high achieved by the Philippine Stock Exchange composite index earlier this month was more than 70 percent above its pre-global crisis peak in 2007. On March 6, the main-share PSEi reached 6,835.21 points for its 23rd record-high closing so far this year.