Ayos lang mag-appreciate ang Peso against the Dollar basta bumaba lang naman sana ang bilihin sa atin.


Peso Seen Firming up to 43:$1 by Yearend


French banking giant BNP Paribas is very bullish on the peso, expecting the local currency to firm up at P43 to the dollar by yearend, zoom to 37 next year and further to 30 -- at par with the Thai baht -- by end-2009.On Monday, the peso closed at 44.85 to the dollar, from Friday’s finish of 45.04.

“With a balance-of-payments (BoP) surplus at record levels and Philippine peso yields still offering a decent pick-up over declining US dollar yields, we rate the Philippine peso as one of our key picks for 2008,” BNP Paribas said in its October outlook on Asian currencies.

BNP Paribas expects the local currency to finally catch up with the Thai baht, which is seen to end this year at 31.50 and then marginally rise to 30.50 by next year and settle at 30:$1 by end-2009.

“In countries where growth is weakening and confidence poor -- such as Thailand -- more [interest] rate cuts are expected. We expect the Thai baht to underperform too, as weaker growth, lower rates and an expensive currency favor other Asian currency plays,” BNP Paribas said.

The peso and the baht had traded closely against the US dollar before the Asian currency turmoil of 1997. But while Thailand was the epicenter of the currency turmoil that triggered a region-wide capital flight, the peso has lagged the baht since then.

BNP Paribas’ forecast is a sustained uptrend for the peso closer to the pre-Asian-crisis levels. Before the sharp currency devaluations that marked the start of the regional crisis in 1997, the peso traded at around 26 to the dollar.

The commentary, written by BNP Paribas analyst Chin Loo Thio, recommended that investors stay “long” or buy into most Asian currencies including the peso throughout this year and next year.

Aside from the peso, BNP Paribas’ other top currency picks for the next two years were the Malaysian ringgit, Singapore dollar, Chinese yuan and the Indonesian rupiah.

“The continued rapid pace of foreign exchange reserve accumulation -- with the exception of countries such as Taiwan and Indonesia which deserve closer monitoring -- is encouraging at a time when there are fears of foreign capital repatriation from emerging markets,” the research said.

“Indeed, flows showing that investors see Asia as a safe-haven play attest to investors’ confidence in the region, underpinned by solid economic growth, strengthening domestic demand, still competitive exports, better policy and attractive earnings potential,” it added.

The Philippines yielded a record-high BoP surplus of $6.75 billion in the January-August period on robust inflows from overseas Filipinos and foreign investors, according to the latest central bank data. The rising surplus reflects a strong buildup in the gross international reserves, which breached the $30-billion mark at end-August.

The gross domestic product grew by 7.3 percent in the first half of the year, with a growth of 7.5 percent in the second quarter, its strongest growth rate in 20 years.

BNP Paribas said the credit headwinds triggered by rising delinquencies among US subprime mortgage borrowers had a limited effect in Asia as risk appetite for Asian assets remained strong.