Holiday remittances to boost peso – BSP
CARLO S. LORENCIANA
The peso could get a boost from the seasonal uptick in remittances during the holiday season, easing pressure on the currency, and could further regain strength next year, a central bank official said Friday.
Bangko Sentral ng Pilipinas deputy governor Diwa Guinigundo said more remittance inflows in the last quarter of the year, rising BPO revenues and tourists' dollar spending are seen to boost the local currency.
More than 10 million overseas Filipino workers are sending record amounts of money back home for the Christmas and New Year holidays.
"The peso is gaining strength against the dollar. It has good fundamentals," he said in an interview at the sidelines of the "Sulong Pilipinas" economic briefing yesterday in Cebu City.
The peso strengthened in the fourth quarter last year and in every December in the past four years. Since 2009, the highest monthly remittances value was in every December and last year's $2.7 billion inflow during the month was the largest ever, based on BSP data.
In recent days, the peso has recovered to the P52-level to a dollar after falling to P54-level in September.
On Thursday, the peso closed at P52.57 against the dollar, shaving off 38 centavos from the P52.95 finish the previous day.
The peso has been caught among the biggest losers in Asia this year, dropping almost 8 percent. Remittances, which totaled $28 billion last year, are the nation's largest source of foreign exchange after exports.
The BSP official also pointed out the market view that inflation would eventually taper off next year could also help boost the peso.
"Combining all these, both the fundamentals and domestic factors, external sentiment is becoming more positive," he said.
"Next year inflation is seen to stabilize. Because of that I think the sentiment in favor of peso is more positive," Guinigundo explained.
"We expect the appreciating of the peso to follow from that positive outlook on inflation," he said.
The government has expected inflation on return to its 2-4% target range next year gayer hitting almost a decade high this year at 6.7% as of October.