- Currency has been Asia’s best performer so far this month
- Peso rising on growth, reserves, remittances: BDO’s Magpale
The Philippine peso strengthened for a fifth week as better-than-forecast economic data and the government’s pro-growth policies boosted investor optimism.
The local currency extended its winning streak to the longest in 16 months as overseas funds increased their holdings of the nation’s stocks by more than $1.1 billion this year. Gross domestic product expanded 7 percent in the second quarter from a year earlier, beating economists’ prediction of 6.6 percent, the Philippine Statistics Authority said last week.
Stronger-than-expected economic growth, record-high foreign reserves and higher remittances are “strong reasons why the peso is rising,” said Paolo Magpale, a treasurer at BDO Private Bank Inc., a unit of the country’s largest bank. “There’s also a lot of optimism on the government’s pursuit of the 10-point program,” he said, referring to the new administration’s strategy to bolster growth to combat poverty.
The peso strengthened 0.3 percent from a week ago to 46.36 per dollar at the 4 p.m. close of trading in Manila, according to prices from the Bankers Association of the Philippines. It has appreciated 1.6 percent this month, the best-performing currency in Asia. The peso was little changed Friday.
The government plans to accelerate spending on infrastructure, invest in human capital and overhaul the tax system, Finance Secretary Carlos Dominguez said after the release of the growth data last week.
The peso will remain supported by dollar inflows and foreign-exchange reserves, while it remains sensitive to concerns overseas, central bank Deputy Governor Diwa Guinigundo said on Monday.