MANILA - (UPDATE) The peso strengthened further against the dollar on Thursday, on the back of a seasonal peak in remittances from Filipinos overseas.

The peso closed at 49.98 on Thursday from Wednesday's close of P50.04, according to the Philippine Dealing System.

"In the short run, the peso is really gonna get stronger," First Metro Asset Management president Gus Cosio told ANC's Market Edge.

The government's planned bond sale in early 2018 could help sustain the peso's advance against the dollar, Cosio said.

Aside from remittances, equity inflows aided the peso's advance against the dollar, Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said Wednesday.

The passage of the first package of the government's tax reform program also led to a "surprising" offshore investor interest in the currency, said Unionbank forex desk head Leo Villacrusis.

Most Asian currencies edged higher against the dollar on Wednesday, with the peso hitting its highest since mid-June after the four-day Christmas holiday.

Espenilla also cited the dollar's softness amid uncertainty on the impact of tax legislation in the United States, and the "attractive" domestic macroeconomic fundamentals.

The Philippines is one of the world's largest recipients of remittances, with millions of Filipinos working overseas sending home money that helps power domestic consumption, a key driver of economic growth.

The peso could test the P49.77 level, but could go back to the P51 level by the end of the first quarter next year, said Villacrusis.

The Philippine Stock Exchange Index was down 0.13 percent to 8,490.17 in early trading. -- with Reuters