Peso marks new four-year high; positive outlook on PH economy cited

6:28 pm | Tuesday, September 11th, 2012

AFP FILE PHOTO

MANILA, Philippines — The peso inched up further on Tuesday as the market continued to anticipate another round of stimulus measure by the US Federal Reserve and as investors manifested a generally positive outlook on the Philippine economy.

The local currency closed at its intraday high of 41.56 against the US dollar, thus registering a new four-year high after it did so on Monday. The latest close was up by 5.5 centavos from Monday’s close of 41.615:$1.

Intraday low settled at 41.67:$1. Volume of trade amounted to $592.8 million from $804.5 million previously.

The appreciation of the peso came as portfolio fund owners awaited an announcement by the US Federal Reserve about a potential third round of stimulus measure to boost the US economy. The market expects the US Fed to engage in another round of bond buying to help inject liquidity to the US economy.

This expectation comes as the employment situation in the United States remains problematic. With more cash in the system, the US economy is believed to have the resources needed for investment activities.

A rise in liquidity in the United States, although meant for the US economy, is seen boosting demand for emerging market assets as well. For this reason, investors snapped peso-denominated securities, traders said.

Market players also said the growth outlook for the Philippines has remained positive, thereby attracting foreign fund owners. Traders said yield-seeking investors have been going for emerging market assets given the unfavorable performance of advanced economies.

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Tags: Business , business and finance , currencies , economy , Foreign Exchange , Philippine peso , US dollar

https://me.yahoo.com/a/y8ibUp18yN9.P7Twd9fsFiiHhIv8#797f4 geo

what is very typical of the elitist economy is that it shelters its investors. the central bank is playing games as if it leads the economy into a higher productive state. the capitalist kings of this economy are cowards they do not lead as risk takers. they suck off the hard working teat of the OFW which is the solid ground and base of the economy. the central bank has created and contrived a false reading of the philippine economy. take for instance pinoy’s magnificent gesture of sending money back to the world bank (translation:back to the U.S. treasury) to appear stable and developing a much better outlook for the world’s investors. it is a circle game and also a house of cards. it is not real and to prevent the OFW to gain any foothold in the economy runs counter to the oligarchs time honored tradition of ‘masters and slaves’. never give the slaves any advantage. pinoy is a coward and i thought he could have been the hero.
mark1205

This is hurting the OFWs for sure but I do believe that if only every Filipino worked for the Philippines, we would have achieved economic highs in Asia. The Filipinos are the most skilled people in the world! High paying jobs here and not abroad is what the skillful Juan needs.

Hayek SaMaynila

I agree that we should eventually aim to strengthen our local economy enough to be able to absorb the sizeable workforce that is growing rapidly each year.

Allowing the peso to strengthen will not help us generate more local jobs either. Because imports become very cheap, local industries or local produce that compete with imports (e.g. agri produce, food) lose price competitiveness and eventually decide to close down. Businessmen woudl rather build groceries and shopping centers filled with imported products than build factories that employ millions. Where will our labor force find work?

The budding BPO sector generates jobs but if we keep allowing the peso strengthen, then our workers become more and more expensive that it no longer makes business sense for an investors to expand or even maintain their BPO business here. India can just take it away from us, as its labor cost is actually getting cheaper. Filiipino wages rose by 5% so far in USD terms and Indian wages declined by more than 5% so far this year.

im_earth

xchange Dollar to Peso payment lowered to pay local payments or bills
Hayek SaMaynila

Rapid PHP appreciation is the best way to squander the recovery and reform momentum P-Noy has restored…Let’s not forget, however, that its the OFs who gave us most of the fruits of our recovery. By allowing USD/PHP to get closer to 41.50 or 41. the BSP is punishing Overseas Filipinos and BPOs, Exporters and PHL based manufacturers, the same heroes behind the rating upgrades by S&P, Moody’s and Fitch.

We should say “Good Bye!” to the chances of an Investment grade rating for
the PHL in the next 18 months. PHP is more than 5.0% stronger than USD since the start of 2012. The wise Indians and Indonesians are actually keeping their currency weaker by 5.0% to 6.0% against the USD to avoid us from taking away jobs from them.

Year-to-date, USD wages of workers in India and Indonesia have become 11% cheaper than wages of Filipinos. Banks could suffer from losses and sizeable bad loans as many Overseas Filipinos will find it difficult to pay for their mortgages, now that they are earning less in PHP.

Investors in the BPO business will have second thoughts about expanding as wages in the PHL become expensive by double-digits against regional counterparts. This can also weaken the local property sector.

The BSP is allowing local farmers and manufacturers that compete with cheap imports to lose their livelihood. Instead of making the peso weaker, it is adding to the pain of lower tariffs as the zero tariff policy in ASEAN 2015 approaches by allowing too much PHP gains.

The BSP said in the past that they will ensure we are middle-of-the pack in terms of currency performance. In contrast, the PHP is strongest currency against the USD so far this year. Where is the consistency there? It is eroding its own credibility.

The return of PHL reform and growth momentum (high
competitiveness and credit ratings, improving budget for infra and
social services) will all be squandered if the BSP does nothing to stop this speculation in the local currency market.

im_earth

Foreign investors eyeing Philippines to expand their business or create business here.
These will create more jobs.

More Jobs, more tax and more money in the Philippines. :D

http://profile.yahoo.com/CH3UCUCHBZLY5WOGXOUDHCJHJE Edgardo

Good news for Peso continued to rise to the dollar!! 1 peso to 1 dollar hopefully.

Peso marks new four-year high; positive outlook on PH economy cited

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