Peso pegged at P46 on Friday’s closing
Posted on December 4th, 2009
For the last 15 months, the peso was pegged at its strongest level after the closing at 46 to $1 on Friday. This was mainly attributed to steady growth of overseas Filipino workers (OFWs) remittances and stable consumer prices.
Last Thursday, the peso gained 25 centavos after settling at 46.25 to $1, which was the peso’s strongest level since closing at 49.925 to $1 in August 29 this year. It opened at 46.35 on Friday before appreciating and closing at 46 to $1. The volume of transacted dollars ballooned to $1 billion from $633.36 billion on Thursday.
Financial experts acknowledge the growth of OFW remittances, especially this coming Christmas season, as the main reason for the steady appreciation of the Philippine peso against the US dollar. A currency trader said more dollars will continue to flow into the emerging markets, including the Philippines.
The Bangko Sentral ng Pilipinas (BSP) said it see the amount of remittances by Filipinos abroad to grow by 4% to a record $17.1 billion this year from $16.4 billion in 2008.
From January to September, the money sent home by OFWs inched up by 4.2 percent to $12.789 billion, compared to $12.273 billion registered for the same period last year. In September alone, remittances jumped by 8.6 percent to $1.446 billion from $1.332 billion in the same month last year.
Inflation, on the other hand, climbed to a six-month high of 2.8 percent in November from its previous level of 1.6 percent in October. This was due to high food and oil prices. But the BSP said it is still well within the target they set. The agency sees inflation averaging between 2.5 percent and 4.5 percent this year, but emerging figures show that consumer prices is likely to average 3.23 percent this year.
