MANILA, Philippines?The peso, being ?one of the more attractive currencies in emerging Asia,? is expected to strengthen steadily next year to trade at P40 against the dollar by the end of 2011, DBS Bank said in its latest report.

The Singapore-based bank said the peso?s strength showed that the country ?has come out stronger from the global crisis.?

DBS predicted that the peso would rise further and gain a peso against the dollar for every quarter of 2011.

From the current 43.70 to the dollar, the bank said the peso would trade at 43 against the greenback by the end of the first quarter, 42 by mid-year, 41 by the end of September and 40 by the end of next year.

This was a better set of projections from a previous one that assumed the peso would be trading at P44.40 at the start of 2011 and P42.90 by year?s end.

DBS said the peso was thriving amid a post-crisis recovery that has shown nascent signs of a more private-sector-driven economy as well as the Philippines? emergence as a global destination for business process outsourcing and its ?greater success? as an electronics exporter.

?Overall, this has resulted in a relatively high growth amid stable inflation, a stronger international liquidity position and even improvements in fiscal finances,? the bank said.

Documents from the National Statistics Office showed that the rise in consumer prices averaged 3.8 percent from January to October, well within the government?s target range of between 3.5 and 5.5 percent.

According to the Bangko Sentral ng Pilipinas, the country?s gross international reserves hit an all-time high of $61.3 billion in end-November.

DBS? reckoning of the situation in the Philippines echoed that of the International Monetary Fund?s, which said last week that the country has emerged well from the global financial crisis.

?The government?s effective policy response, as well as strong external liquidity and a sound financial sector, helped to cushion the economy against the global downturn and foster a strong recovery,? said Vivek Arora, chief of the IMF mission to the Philippines.

A local treasury veteran has also forecast the peso to continue its upswing toward 40 to 41 against the dollar next year given the strong influx of foreign exchange into the country.

Roland Avante, treasurer of Sterling Bank Asia and former president of the Money Market Association of the Philippines, told reporters Monday that the dollar would likely be in a long-term bearish cycle while strong capital flows to Asia would sustain the upward pressure on the local currency.

Based on recent historical trends, Avante said the peso has appreciated by an average 5 percent a year. His forecast already assumed another round of quantitative easing through massive bond buyback by the US Federal Reserve, which in turn was seen to keep Asian currencies strong.

The peso on Monday closed at the session?s low of 43.92 from 43.66 against the greenback on Friday. With so much cash floating in the local financial system, Avante said the Bangko Sentral ng Pilipinas would have the leeway to keep interest rates at historically low levels.