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Peso hits 41:$1, highest in 56 months

Dollar supply surges due to heavy Christmas inflow

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The peso closed at its highest level in 56 months against the dollar on Monday, Nov. 26, 2012, at its intraday high of 41 against the greenback.

The peso closed at its highest level in 56 months against the dollar on Monday on the back of rising remittances from overseas Filipinos and improved sentiment on the global economy following reports of rising consumer spending in the United States.

The local currency closed at its intraday high of 41 against the greenback, up from 41.05 on Friday. The last time the peso closed stronger than this rate was on March 7, 2008, when it hit 40.85 against the dollar.

The intraday low settled at 41.025:$1. Volume of trade amounted to $655.09 million, down from $733.7 million last Friday.

Jonathan Ravelas, market strategist for Banco de Oro, said the growing remittances due to the coming Christmas holidays helped boost the value of the peso against the dollar.

Ravelas said expectations that the Philippine economy would post another favorable growth in the third quarter (official growth figures will be announced Tuesday) after expanding by 6.1 percent in the first semester boosted the appetite for peso-denominated securities.

He added that reports on the impending merger between Bank of the Philippine Islands (BPI) and Philippine National Bank (PNB) led to a favorable outlook on the domestic banking sector and boosted the appetite for publicly listed stocks in the country.

“There has been renewed interest [among portfolio investors] in the banking sector. The story of consolidation in the banking industry and optimism on the economic growth performance in the third quarter aided in higher purchases of stocks,” Ravelas told the Inquirer.

Other market players said the rise of the peso, which came with the appreciation of other Asian currencies, came following favorable reports on consumer spending in the United States. Traders said an increase in consumption in the world’s biggest economy has a positive impact on export earnings of countries like the Philippines.

According to a report from a group of US retailers, Americans spent 13 percent more during the last four-day Thanksgiving weekend compared with that in the same period last year.

The Bangko Sentral ng Pilipinas had said that it would continue keeping an exchange rate policy that provided for the exchange rate to be largely market-determined, but allowed the BSP to intervene to prevent a sharp and sudden rise or fall of the peso.

The BSP said the extreme volatility of the exchange rate would be bad for businesses and the economy.

Market players said that were it not for the central bank’s dollar-buying in the market, the peso could have appreciated at a much faster rate.

BSP Assistant Governor Ma. Cyd Tuaño-Amador also said that the BSP would allow the peso to appreciate if such movement would be fueled largely by foreign direct investments. However, she said the BSP would exercise its flexibility to intervene in the market if the appreciation pressure would come from speculative investments.


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Tags: currencies , dollar , Forex , Peso , Philippines

  • robrano

    to tra6Gpeche

    No need to salute the government. The peso rate is based on a big manipulation to get the super big year end remittances cheap, and then BSP blames the remittances for the rate. It means, OFWs have to send more and more dollars and their families get less and less pesos while peso prices shoot up. OFWs are now “new milking cows”, not new heroes.
    And not to forget, the rate was even higher under the GMA administration, while prices have been much much lower and the purchase power of the peso much higher. Really no reason to salute the government, rather the contrary.

  • http://profile.yahoo.com/OWNWCGANYNERXTTZXJDY6KGPJM James Barrett

    7.1 percent  growth for the rich or poor Filipinos included? This economic growth is unprecedented for the Philippines considering few years ago they call us the Sickman of Asia. I will believe this economic growth is true when I can see my fellow poor Filipinos start eating 3 times a day and  when the middle class start growing in big percentage of the population. The 7.1 percent growth might be applied only to the few rich families like the Cojuangcos,Sy,Tan  and others.

  • tra6Gpeche

    If this peso and dollar exchange rate is due to good Philippine economy, then I salute the Philippine government. However, if it is due to the remittances by Filipinos working abroad, then I salute these Filipinos. While they are helping their country, Philippines, their remittances, if converted into pesos, become smaller and smaller. It is not surprising that these OFWs are all called the new heroes of the Philippines. They do not gain anything when Philippine money becomes stronger against the Dollar. This is what I call sacrifice!
     

  • http://pulse.yahoo.com/_LDLKDDUWLNDV6NX47GVOKLEHAA spyros r

    OUR GOVERNMENT IS SOOOOO STUPID. THEY SHOULD DO AS CHINA DOES, MANIPULATE THEIR CURRENCY SO AS TO AVOID THE GRUNT OF THE CRISIS. THE DOLLAR TO PESO EXCHANGE RATE IS VERY BAD FOR OUR OFW’S WHO ARE NOT GETTING PAID MORE ABROAD DUE TO THE CRISIS BUT THEY WOULD HAVE TO SEND MORE MONEY BACK HOME BECAUSE THE DOLLAR IS GETTING WEAKER AGAINST THE PESO.

    I MEAN COME ON, $1000 = 41,000 PHP AS COMPARED TO BEFORE WHERE IT WAS $1000 = 46,000 PHP. NOTHING IN THE PHILIPPINES IS GETTING CHEAPER ANYWAYS, IT JUST MEANS THAT OUR OFWS HAVE TO SEND MORE MONEY HOME… THIS IS JUST SOMETHING THE GOVERNMENT IS NOT THINKING OF

    • http://profile.yahoo.com/5O5BUQXKLYHWF7BCY2BL5NHRFI Liberty

      then what about the non OFWs like me? This is an advantage for non OFWs imagine, if I will be going to US, (let’s say airfare is $1,200) then I will be paying less.

  • robrano

    to Michelle Martin

    You re rong. It is free to be manipulated, that is true. Or can you explai why the peso is always op when big OFW remittances are expected, like at enrolment or like now near to Christmas? That is milking the OFW families, nothing else. The gov. uses any possibility to get remittances as cheap as possible when dollar nominated loans are paid or anything else wich is counted in dolllars.
    That the millions of OFW families are affected, or export and tourism,is not important. And big business which earns pesos can the buy into foreign business with the cheap dollars.
    It is the highest irony that BSP blames the big remittances as reason why the remittances are worth less. Hopefully, more and more OFWs will use other kinds of money transfer, in pesos and direct to the families instead through banks and BSP. Then BSP can not use the dollar remittances as reason for the low rate and after a while, they will be happy to get dollars at a better rate. Which then will boost export and tourism. The consumer has anyway nothing from the high peso since even imported goods, cheper now, are permanent increasing in pesos.
    Look at fuel. The peso price is now higher with a 41 rate and one barrel at 85 dollar than at the time with a rate of much over 50 and one barrel near 130 dollar. The same power, it increases on coal and oil costs, instead going down in pesos  due to cheaper coal and oil costs. Free market? Yes, free tomanipulate, and the gov. can do nothing because it does the same. Malaysia has pegged a rate many years ago and it  works well. When the Swiss Frank rose to much, it was pegged at a fix rate to the Euro and export and tourism work well.

  • http://twitter.com/arvinic Arvin Acosta

    maganda ang move ng BSP. bumibili sila ng dolyar para di gaanong mabilis ang pagtaas ng piso. ang benepisyo nito ay mas madali nating mababayaran ang ating foreign debt. pwede din nating samantalahin ang pagkakataon para bumili ng makinaryang magpapabilis sa paggawa sa sektor ng agrikultura at manufacturing. at higit sa lahat, mas mura nating mabibili ang mga jet fighter at warships para sa AFP.

    may epekto ang pagtaas sa mga exporter at OFW pero dapat din tayong matuwa dahil lumalakas na ang ating buying power.

  • Wearth

    may epekto ba itong pagtaas ng piso? mula ng una pang panahon walang
    pinagbago ang gastusin lumalaki lang ng lumalaki, wala naman
    nakikinabang dyan kung hindi mga negosyante, tataasan ba nila sahod ng
    mamamayang pilipino? sana mag regulate ang gobyerno na magbaba na ng
    presyo ng bilihin at itaas or itaas ang sahod natin. para maramdaman ng
    taong bayan itong sinasabi nilang pag angat ng piso sa bansa natin.

    • http://www.facebook.com/profile.php?id=100003712489179 Michelle Martin

      inflation rate is low. 

  • http://twitter.com/iam_cii Ienore

    Mr. Iggy Ramirez, sige iboto mo uli si Gloria mo, my God !!!! asan ang brain mo!!!!



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