Economists in the Philippines predict that the Philippine peso will reach 40.50 versus the dollar by the end of this year, due to the recent investment grade status by debt watcher Standard and Poorís (S&P).
According to Economist Emilio Neri Jr. of the Bank of the Philippine Islands, if the pesoís value hits 40.50 to 1 USD this year, it will be exceeding the 40.57 record for the past five years. He added that thereís a possibility for Philippine-issued assets to be prioritized by investors who closely follow S&P.
Meanwhile, Euben Paracuelles, economist at Nomura Ltd., stated in a separate research that the upgrade from S&P could mean that itís confident that the upcoming results of the senatorial election will enable President Aquino to approve reforms and should the Presidentís camp win, it could result to the peso hitting 40.55 to a dollar.
Revenues from the business process outsourcing (BPO) sector and remittances from OFWs are predicted to counter the balance of payments (BOP), and could even generate surplus that could push the peso further
The Bangko Sentral ng Pilipinas (BSP) said the peso appreciated 0.6 percent during the first quarter and was the second-best performing currency in Asia in 2012.