MANILA, Philippines -- The peso strengthened on Thursday to its highest level in about two years, buoyed by a favorable sentiment on the Philippine economy that was supported by the release of an encouraging exports growth figure for July.

The local currency closed at 44.12 against the US dollar, up by 13 centavos from the previous day's finish of 44.25.

Intraday high stood at 44.06:$1, while intraday low settled at 44.25. Volume of trade stayed above the $1-billion mark and amounted to $1.11 billion, which was, however, lower than the $1.36 billion previously.

The rise of the peso on Thursday came after the National Statistics Office reported that the country's exports grew year-on-year by 35.9 percent in July to $4.5 billion. The growth was faster than the 33.7 percent registered in June.

"The growth in exports was an encouraging figure," said Jonathan Ravelas, market strategist for Banco de Oro.

Nonetheless, he said the Philippines could have done an even better job at competing with other exporting countries, adding that the exports growth figure could have been better.

"There is still room for exports to grow. This means, there is still room for the peso to appreciate some more," Ravelas said. He projected that the peso could a high ranging from 43.7:$1 to 44:$1 in the next few weeks.

He said favorable macroeconomic figures for the Philippines have been encouraging the entry of more foreign portfolio investments, mostly placements in stocks, into the country.

The positive investor sentiment though is not peculiar for the Philippines, as other emerging Asian economies are likewise seeing their currencies strengthen.

The Thai baht, for instance, appreciated to 31 per US dollar, hitting that level for the first time since 1997. This is on the back of positive growth outlook despite recent political tensions in Thailand.

Traders said struggling recovery of the US economy from last year's recession and lingering concerns about the debt situation of countries in the Euro area have been pushing investors to place their funds in developing economies in Asia, the region expected to still lead this year's growth of the world economy.

They said emerging markets in Asia have become preferred investment sites given their more stable economies and the higher yields they offer to investors.

The International Monetary Fund and other foreign multilateral institutions have projected that emerging economies in Asia would grow this year at a pace faster than the rest of the world.

In the case of the Philippines, the domestic economy grew by a surprising 7.9 percent in the first half, making it probable for the government's full-year target of between 5 and 6 percent to be breached.