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Peso strengthens on ratings upgrade

Local assets seen attracting more foreign investors

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Standard & Poor’s. AP FILE PHOTO

The peso strengthened back to the 40-to-a-dollar territory Friday to hit its highest finish in four weeks as financial markets cheered the decision of Standard & Poor’s to give the Philippines an investment-grade rating.

The local currency closed at 40.91 against the greenback, up 14 centavos from Thursday’s close of 41.05:$1. Intraday high hit 40.90 to $1 while intraday low settled at 41:$1. Volume of trade amounted to $997.1 million.

“The investment grade gave a boost to Philippine assets, thereby causing the peso to appreciate,” said Jonathan Ravelas, market strategist for Banco de Oro.

The appreciation of the peso came as the Philippine Stock Exchange Index (PSEi) breached the 7,200 mark to close at a new   record high of 7,215.35.

Traders said peso-denominated securities became even more attractive with the upgrade last Thursday of the country’s credit rating from S&P. The move of S&P to raise the country’s credit rating by a notch from BB+ to BBB-, the minimum investment grade, followed a similar move done by Fitch Ratings in March.

The two credit-rating agencies cited the country’s favorable macroeconomic fundamentals in their decisions. These included rising foreign-exchange reserves, a declining debt burden of the government, benign inflation, robust economic growth rate and a stable banking system.

With the investment grade ratings, some traders expect the peso to stay as one of the most expensive Asian currencies this year.


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  • Ako_Hiking

    All these ratings upgrade are good, we suppose, and it can be attributed to the work that the previous Administration initiated but what has this current Administration done to make sure that the upgrades reach and benefit the poor masses. NSO reported that 1 out of 4 Filipinos suffer from poverty and also it was shown that another 1M Filipinos joined unemployment.

    • cabcog

      I don’t agree. As you know, GMA will not achieve what Pnoy had purely because businessmen both local and foreign have no confidence in her. During the time of GMA, there were reports that statistics were tampered or adjusted so that she will look good.

      You cannot alleviate poverty and create jobs overnight. The ratings lessen the interest charge on gov’t debt since the improved rating suggest that the Philippines has better ability to repay its debts. For private business, the improved rating indicates that it will be more profitable to do business in the Philippines on account of better infrastructure, enhanced macroeconomic policies and stable financial system.

      We should all be hopeful that the investment ratings stay for good. In the long run, everybody will benefit on a better business climate/outlook. Let’s all think positive.

      • Ako_Hiking

        Foreign businessmen don’t trust the current Administration as well…at least not enough to invest in the country because there have been no major investments yet in the country since Aquino took office.

      • cabcog

        Could you please check first the PSE and BSP websites and articles on FDI to the Philippines. There have been a number of top-up placements and IPOs over the past years since Pnoy took office.

      • Ako_Hiking

        Yes and can you check and review as to why the Philippines was given all these upgrades and credit ratings…it is due to the initiatives and fiscal management which was done by Gloria’s Administration..this according to both the S&P and FITCH.

  • parefrank

    It is really funny. The peso strenghtens not at favorable dates in RP, but on good news about USA, China, European Union, Japan. Logically, the currencies of these countries should go up, not the peso which has nothing to do with the good news.
    And the credit rating upgrade? Mainly because BSP has a big amount of foreign currency and therefore RP can pay back or interests of credits. But this has also nothing to do with good governing or managing. It is caused by the fact that Filipinos have to work abroad since there are no local jobs for them. So, the government relies on unemployment in RP, to force people to work abroad and send home the needed foreign currencies to get a good credit rating.

    • cabcog

      A stronger peso is both good and bad news. It depends on your financial position i.e. whether you are US$ debtor or creditor. For OFWs and exporters, it is definitely a bad news. For the gov’t, as a $ debtor, it will require less $ to pay their maturing debt because of the stronger peso (e.g. the gov’t borrowed $ when exchange was at P56/$ six years ago and imagine if you are going to pay it today at P40/$).

  • http://twitter.com/MrGreenglow Green Lantern

    I don’t believe in “The Poor Getting Poorer” Stuff. Most of my friends and I grew up poor. We strove hard. Some had scholarships because we took our studies seriously. We received no dole-outs from the government. Now we are not poor. Some friends live and work abroad. Many of us are here in the Philippines. We never stole from anyone. I know 2 of my friends are dirt poor now. They were the “rich kids” in class.

    • parefrank

      And probably, like most rich, they got rich on the expense of the poor. Because hardly one can become rich out of the rich, except in business pf luxury goods or services. But for this, usually one has to be rich already.
      Look at the big businesses, they make billions of profit and increase profits by 20% and more in a year;s quarter. But who is paying this, the other rich or the poor common customer? Or why Kris Aquino, even she earns well, is the biggest tax payer and not the billionaires, even dollar billionaires?

  • sanjuan683

    hindi mahalaga yan peso. Kailangan ng Pinas maraming trabaho trabaho trabaho trabaho. Huag ninyo ululin ang mga Pinoy kung lumakas ang piso o pulling away ang stock. Hindi nakakatulong yan sa mga walang trabaho. Matagal na walang trabaho trabaho dito bansa Pinas puro yabang ka Abnoy Puro yabang ang Abnoy administration mo. Tatlong taon ka na sa Malakanyang puro paninigarilyong ang inaatupag mo sa loob ng Palace amoy beha na. Dating amoy alak nuon panahon ni Erap plunder.

    • http://www.facebook.com/highpower.led.7 HighPower Led

      alam mo sir nakakasawa na itong ganitong salita, lagi na lang reklamo ng reklamo na walang trabaho, kung hindi ibibigay yung investment grade na yan sa pinas reluctant mag invest ang ibang bansa sa atin.

      saka sa totoo lang may business ako at may mga na hihire ako na although ok ang sahod umaalis for a simple reason na nahihirapan sa trabaho, mapili rin kasi yung iba at gusto malaki agad sahod ayaw mag simula sa baba.

      yung iba naman na galing sa lugar namin na mahirap ren, i hire mo na gagawa pa ng kalokohan like mag uuwi na gamit, in short nag nanakaw pa, once again gusto kasi easy money.

      nasa tao rin yan boss, hindi ako naniniwala na pag hindi ka nag sikap hindi mo makukuha yung buhay na gusto mo.

      Just my 2 cents.

  • facq2

    I MEAN WILL NOT BUY BIG TICKETED ITEMS!

  • facq2

    LESS PINOYS WHO JUST DEPENDS ON REMITTANCES WILL BUY BIG TICKETED ITEM SUCH AS REAL ESTATE, SO BACK TO SQUARE ONE ANG ECONOMY NG PINAS! LALO NA YUNG HOME LOAN INTEREST STILL THE SAME MASYADONG MATAAS STILL IN TWO DIGIT. KAYA ESEP-ESEP KAYO.

  • txtman

    MEANING SOOOO BAD FOR EXPORTERS
    ERGO LESS REAL INVESTMENTS
    LESS JOBS
    .
    NO JOBS = NO MONEY = POOR
    .
    RICH (FOREIGNERS) =STOCK MARKET = MORE MONEY (OUTSIDE PH)
    .
    SINONG NAKINABANG?
    .
    RICH (PENOY OLIGARDS) & RICH FOREIGNERS
    .
    THE POOR WILL STILL BECOMES POORER
    .
    THE OFWs INCOME (REMITTANCES) BECOMES SMALLER= HARDSHIPS
    .
    GALING TALAGA NG MGA MAYAYAMAN ANO?
    .
    NO WONDER LAVS NA LAVS NG MGA RICH SI PENOY
    .
    PITIFUL
    AHAHAHAHA

    • http://twitter.com/hp2184 RJ Legaspi

      Stock market is not only for the rich. Even those not earning a lot could invest and yield from such investment. One if the problems is we are not financially aware and knowledgeable. Instead of blaming it on the rich (and the government) why not blame ourselves? The time spent whining about these issues could have been spent on ways to better our lives.

      • sanjuan683

        We blame this government doing nothing to have more more jobs jobs jobs. This government is inutil inutil in all aspect. How we have better lives if there are no jobs jobs jobs. This government spent a lot pork barrel to the congresstong and senatong. Why not put this money to built factories to have more jobs jobs jobs jobs. Your comment is so stupid.

      • go88

        I wouldn’t advise poor to invest in the stock market because they don’t know what they are doing and can’t react in time like the big players.

        One of my uncles who was an ordinary employee made big money from stock investment in the US, but this was when the economy was stable. Nowadays there is a lot much more volatility and it’s very easy to loose everything if you don’t react on time.

  • 444mangyan888

    CB konteng balanse naman para sa mga ofws…

    • http://twitter.com/erncastillo ern

      goods will be cheaper in the long run.

      • http://www.facebook.com/profile.php?id=100003510624279 Enero Lamo

        goods will be cheaper in the long run??????? ang mahal pa rin ng bigas eh…..ung strong peso ay mayayaman lang ang nakinabang dahil konting pesos lang ang ibabayad nila sa importation at mahal ang prices pag ibenta dito sa pinas..kalokohan lang ung investment grade …..huh..



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