MANILA, Philippines?The peso inched up further in Friday?s trade, as favorable investor sentiment boosted appetite for currencies of emerging Asian economies.

The local currency ended the week at 46.05 against the US dollar, stronger than its Thursday?s finish of 46.09. The closing of the peso Friday was also its intraday high. Intraday low was recorded at 46.145 against the greenback.

Volume of trade went up to $753.1 million from only $611.44 million on Thursday.

Traders said the peso may appreciate further in the coming week, as optimism for Asian developing economies is sustained by encouraging macroeconomic indicators. Emerging markets from Asia are seen to lead growth of the global economy this year, they said.

Some analysts expect the peso to breach into the 45-to-a-dollar territory in the coming week, probably hovering within 45.5 to 45.8 to a US dollar.

They said sustained growth in remittances and modest rise in foreign investments, including portfolio and direct placements in the business process outsourcing industry, will provide boost to the local currency.
The appreciation of the peso, however, is providing a challenge to the country's central bank. The Bangko Sentral ng PIlipinas is being pressured by the export sector to deliberately weaken the peso, particularly by buying more dollars from the foreign exchange market. Exporters are complaining that the appreciation of the peso is hurting competitiveness of Philippine-made products.

The BSP said it is intervening in the foreign exchange market from time to time, but only to avoid very sharp and sudden rise of the local currency (or even very sharp and sudden decline). The BSP cannot have a bias in favor of a weak currency, noting that while the export sector is benefiting from a weak currency, other sectors, such as importers and entities with debts denominated in foreign currencies, is disadvantaged by the same. Michelle Remo