by: Sarah Joson
Tuesday, December 18, 2012 | Outsourcing News |
Due to strong remittance inflows and the growing number of foreign investors to the country, an investment bank predicted that the Philippine Peso will hit the P37 to a dollar mark in the coming year.
According to a report from the Bank of America-Merrill Lynch (BofA-ML), they are keeping an eye on Bangko Sentral ng Pilipinas’ aggressive actions as it is striving to counter the rapid appreciation of the peso against the dollar, propelled by the surge of foreign investments.
However, the rise of the peso could affect the growth of the local business process outsourcing industry, remittances from overseas Filipino workers, and value of dollar exports.
Some of the BSP’s efforts include purchasing dollars to improve the strength and demand of foreign exchange. BofA-ML noted that it will not work as the BSP is suffering losses, caused by costly production of local currency and valuation losses from intervention actions. Moreover, a P68.36 billion deficit is faced by BSP, which is two times more than last year.
BofA-ML noted that the local economy could experience a growth of 5.5 percent as the strong peso will be able to ease inflationary pressures in 2013, as well as provide leeway for lower lending interest rates from banks.
The country’s gross domestic product (GDP) was predicted to increase to 5.7 percent. It was able to reach 6.5 percent during the months of January up to September.
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