Philippine Peso Erases This Year's Loss as Funds Snap Up Local StocksBy
Currency posts its biggest single-day advance in a year
Remittances likely higher ahead of Easter holidays: RCBC
The Philippine peso rallied the most in a year, erasing its 2017 loss, as foreign investors gorged on local stocks and amid speculation remittances from overseas Filipino workers rose before the Easter holidays.
The peso advanced Monday when most Asian currencies succumbed to a stronger U.S. dollar, as Philippine’s benchmark equity gauge approached a bull market. Global funds purchased a net $166.9 million of local shares last week, the biggest inflow since May, ending a selloff that lasted 11 weeks.
Overseas investors have likely been drawn after Fitch Ratings last month affirmed its investment grade rating for the country with a positive outlook, according to Jonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila. Optimism surrounding President Rodrigo Duterte’s promised tax reforms has also contributed to the inflows, he said.
“The ugly duckling is now a beautiful swan,” Ravelas said of the peso, which was Asia’s worst-performing currency at the close of trading on Friday.
The peso jumped 0.8 percent, the most since March 2016, to 49.705 per dollar in Manila, according to Bankers Association of the Philippines data compiled by Bloomberg. It touched 49.70 earlier, the strongest level since Feb. 7. The Philippine Stock Exchange PSEi Index climbed 0.5 percent in a second day of gains, taking its advance this year to more than 11 percent.
The currency probably also benefited from likely higher dollar remittances from overseas workers to their families given a shorter work week, said Colin Rodriguez, treasurer at RCBC Savings Bank Inc. Philippine financial markets and offices will be shut Thursday and Friday for Easter. Rodriguez sees support for the dollar-peso at 49.70.
The peso will weaken to 50.7 per dollar by the end of June, according to the median estimate in a Bloomberg survey.