Peso to hit P37.50 in 2008, says CitiGroup

The Philippine Peso might reach P41.50 to the dollar by end-2007, and can further appreciate to P37.50 next year, according to CitiGroup Inc.

The global banking giant said the continuing rise of the peso will be caused by the robust flow of remittances from overseas Filipinos, a weak US dollar, an optimistic economic outlook for the country, and sustained government financial consolidation.

The same report noted, however, that the peso’s rise might be tempered in 2009 partly due to the upcoming presidential election in 2010.

The report published by CitiGroup entitled “Asia economic prospects for 2008″ says it is most bullish on the Philippine peso, the Indian rupee and Chinese renminbi among emerging Asian currencies for the coming years.

The prediction comes in the heels of another estimate by the chief investment officer of Sunlife of Canada who expects the peso to rise to P38 by 2008.

On December 6, the Philippine currency closed at a 7 1/2 year high of P41.88 to the dollar supported by strong remittances from overseas Filipino workers ahead of the Christmas holiday.