MANILA - The peso is Asia’s best performing emerging market currency, recovering from its lowest levels in 10 years, as bright economic growth prospects lure back foreign investors.
The peso gained 1.48 percent against the dollar so far in April, next only to the Japanese yen and edging out India’s rupee, Malaysia’s ringgit, Indonesia’s rupiah, Singapore’s dollar and Thailand’s baht, according to data from Bloomberg.
The peso could strengthen further to P49.25 to P49 against the dollar towards the second half, buoyed by a seasonal pick-up in remittances from overseas workers, BDO Unibank chief market strategist Jonathan Ravelas told ABS-CBN News.
“The peso has risen,” Ravelas said. “Funds are coming back. What’s driving the optimism in the Philippines is a series of good news.”
Fitch Ratings’ decision to maintain Philippine debt at investment grade and growing expectations of sustained economic growth after last year’s 6.9-percent expansion helped boost investor sentiment, Ravelas said.
“The government has also signaled that it’s spending and committed to build build build,” Ravelas said, referring to President Rodrigo Duterte’s P8-trillion plan to rebuild the country’s creaking infrastructure that has held back growth.
The peso ended slightly weaker Monday as it closed at P49.54 to the US dollar after opening at P49.45.
Philippine stocks meanwhile were also down Monday with most other markets in Asia amid concerns over North Korea's failed missile launch over the weekend. The PSE dipped 0.54 percent to close at 7,588.
A correction from the post-election rally in the US is driving funds back to the Philippines back to the Philippines and other emerging markets, Ravelas said.
“The Philippines is still one of the strongest economies. We’re still growing from last year,” Ravelas said.
The World Bank last week said the Philippines’ would likely match this year and next year the 6.9-percent gross domestic product growth it posted in 2016.