US$ Exch Rate:Yr end:P43/Yr 2008-P37 & Yr 2009 - P30?

[chua_riwap]

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.

[Monseratto]

A high peso is bad for exporters and our fellow OFWs.

[empy]

i'd like to see the assumptions that Paribas put in their economic models. what true economic indicators indicate that the value of the peso will appreciate by around 40%? or the dollar to decrease by 40? the long term USD yield is not going to decrease by 40% because of the subprime mortgage crisis alone.

[juntzo]

i'd like to see the assumptions that Paribas put in their economic models. what true economic indicators indicate that the value of the peso will appreciate by around 40%? or the dollar to decrease by 40? the long term USD yield is not going to decrease by 40% because of the subprime mortgage crisis alone.

hopefully the mortgage crisis is over... the DOW just hit another high. the highest so far at 14081.

if the peso will reach 30 to $1, my business will be in a bit of trouble!

[artpogi]

Am no economist but I don't think this will happen.

Just last week the BSP (Bangko Sentral) already intervened against the appreciating peso, so, BSP will not let this happen.

I have a question to those that are familiar with economics or forex.

Some economist say that "a very strong peso is not good for the economy, it does not reflect the true value (or worth?) of the peso", what exactly do they mean when they say "it does not reflect the peso's true value" or something to that effect.

[Horsepower]

Well, we only have three months to wait. hehe

At this time, it's best to convert your money to Euro or risk losing a LOT of money as the USD goes down.

Middle East countries are even working to convert their reserves to Euro. It's not wise to stick with US Dollars at this time. The ripple will be felt around the world for sure.

[empy]

HP, i think a lot of that uncertainty about the US economy and the subprime crisis is already built into the poor USD pricing right now. for it to further tank, there would have to be more bad news about either the US economy, or the competitiveness of US goods and services vs the global marketplace.

i definitely agree that it makes sense to diversify your holdings into other currencies. the Euro looks a tad overvalued right now (IMHO), and everybody seems to be going there (and into the INR as well). why not go somewhere else with your money...?

[_Qwerty_]

bad yan.. tumataas nga piso.. di naman nararamdaman.. sana fixed na lang nila sa 45.00.. malaki na nawawala sa mga remittance namin.. heheheh tsaka lugi din mga OFW..

[meledson]

Good news for importers, bad news for exporters, foreign investors and OFW.

For me, Ok lang na tumaas ang Piso basta dahan dahan lang. Now parang sobrang bilis ng pagtaas.

[chua_riwap]

Well, we only have three months to wait. hehe

At this time, it's best to convert your money to Euro or risk losing a LOT of money as the USD goes down.

Middle East countries are even working to convert their reserves to Euro. It's not wise to stick with US Dollars at this time. The ripple will be felt around the world for sure.

Usually kasi mga OFWs dito sa ME, US$ ang dala (yung ipon nila), pag nagba-bakasyon. So, dapat pala Euros na ang dalhin natin instead of Dollars pag nagbabakasyon tayo.

Kaso yung remittances namin dito sa Saudi, based sa palitan ng US$.