The Philippine peso is seen appreciating further in the succeeding quarters of the year, according to results of the Second Quarter Business Expectations Survey (BES) of the Bangko Sentral ng Pilipinas.
“More respondents expected the peso to appreciate in second quarter and third quarter 2013, although the number that said so declined compared to the previous quarter,” the survey said.
The BES added the respondents cited strong inflows of overseas Filipinos’ remittances, business process outsourcing services receipts, foreign investments and the recovery of export demand as factors for the sustained peso appreciation.
Contrary to the BSP survey, First Metro Investment Corp. and the University of Asia and the Pacific Capital Markets Research said that the peso may depreciate in the coming quarters.
“The peso’s rise has finally reversed, aided by the high demand for dollars due to infrastructure projects and risk-off sentiment in markets,” the think tank said in the May issue of its newsletter The Market Call.
In April, it reported that the peso-dollar rate averaged P41.14 per US dollar, representing the dollar’s gain of 43 centavos compared to the previous month.
Although the year-on-year growth is positive, it was minimized to 3.6 percent coming from a series of 5-percent to 7-percent year-on-year upticks in the previous months, it added
Furthermore, the think tank said that the peso traded at a wider range of P40.81 per US dollar to P41.31 per US dollar, as the weaker Japanese Yen discouraged arbitrageurs from betting against the US currency.
“This peso depreciation bias is likely to continue both in the short and medium terms, as actual exchange rates have already crossed over the 10-day and 200-day moving averages,” it stated.