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By Maricel E. Burgonio, Senior
Reporter
The peso strengthened further on
Monday, touching the 46-to-a-dollar level on easing risk aversion
and a weaker US currency, before giving up early gains later in the
day.
At the Philippine Dealing System,
the local currency closed at 47.170 to the greenback from 47.040
last Friday. It opened at 46.950 and strengthened to 46.910 before
weakening in the afternoon. Volume turnover reached $772.280
million.
Traders said the peso’s
weakness was due to corporate demand from energy firms as they paid
their obligations.
“The depreciation of the peso
today is market driven due to corporate demand and partly
correction,” Marcelo Ayes, RCBC senior vice president, said.
The market also priced in the
expected policy rate reduction of the Bangko Sentral ng Pilipinas (BSP)
and continued remittance inflows.
“The peso is expected to move
sideways. The market is also looking at the pending data releases
from the US such as consumer confidence and employment,” Ayes
said.
He said the peso is affected by
the weak US dollar, which appreciated fast last week.
Central banks in Asia are
intervening in their foreign exchange markets to avoid the fast
appreciation of their currencies, which primarily hurts their
exports.
BSP Deputy Governor Diwa
Guinigundo said the country has enough foreign exchange inflows to
boost its reserves level, adding further foreign borrowing was no
longer necessary.
“I don’t think at this point
we need to tap external markets. The balance of payments [BOP]
continues to be in a very healthy shape,” he told reporters.
“If you look at inflows, it
continues to be robust. If you look at tell tale signs from forex
market, peso-dollar rate continues to show there’s dollar
liquidity in system. There’s sufficient inflow of forex from
remittances,” Guinigundo said.
Earlier, Standard&Poor’s
said the global recession could erode the Philippine BOP and force
more foreign borrowing.
The government is setting aside
P700.6 billion for debt payments this year, higher than the P681.5
billion programmed earlier and from last year’s P636 billion.
A summary of the country’s
economic transactions with the rest of the world, the BOP registered
a surplus of $466 million in April, a reversal from the $472-million
deficit position in March, on the back of higher loans deposited by
the national government.
This brought the BOP surplus to
$2.198 billion at end-April, higher than the $1.732 billion in
March.
The country’s gross
international reserves (GIR) level is projected to reach $38 billion
this year, from $37.6 billion last year.
Reserves reached $39.5 billion at
end-April this year, from the $39 billion registered at end-March.
Remittances grew by 3.1 percent
to $1.471 billion in March due to continued demand for Filipino
skills abroad despite the global economic slowdown.
The BSP projected the BOP to
reach a surplus of $700 million this year despite slower economic
growth from $89 million last year.
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