Peso seen to further strengthen vs US dollar

by Alvin Elchico, ABS-CBN News

Posted at Feb 04 2013 10:19 AM | Updated as of Feb 05 2013 03:05 AM

MANILA, Philippines - Financial analysts agree that the peso will further strengthen in the next few months, and may even reach the P37-P38 level to the US dollar by yearend.

First Grade Holdings managing director Astro del Castillo says the peso will further surge against the dollar, especially with the Philippines expected to get investment grade rating this year.

The peso closed at P40.595 in trading today.

According to del Castillo, despite numerous reforms, the US and European economies are still weak, thus the depreciation of their currencies.

In contrast, del Castillo says the Philippine economy is attracting more hot money as well as remittances from overseas Filipino workers.

Ideally, del Castillo claims that prices of imported goods should go down with a stronger peso.

But when asked why prices of fuel, which are imported, are about to go up anytime this week, del Castillo says that if the peso is not appreciating, the increase could be bigger.

Oil industry sources said gasoline increase for this week will hover between P1.10 to P1.40/liter while diesel is also going up by an estimated P0.40 to P0.60/liter.