Market analysts are again expecting the Philippine Peso to further appreciate against the US Dollar.
In a GMA News article, London-based investment bank Barclays Capital says it is revising its earlier exchange rate forecast from P42.50=$1 to P40=$1 within the next 12 months.
According to the bank:
Given the robust domestic economic fundamentals — a sharply narrower funding gap, robust remittances inflows, and the central bank’s apparent comfort with currency appreciation — we are lowering our three-month dollar or peso forecast to P42.50 and our 12-month forecast to P40.
The peso is expected to further appreciate as the Christmas season nears, when Overseas Filipino Workers (OFWs) send money remittances to their families in the Philippines.
Overseas remittances remain robust, with the Bangko Sentral ng Pilipinas (BSP) reporting this week that inbound remittance during the first 7 months of the year totaled $10.679 billion, up 7.1% compared to the same period last year.
If this forecast of a depreciating peso would come true, one might be better off converting dollars to the local currency in order to lessen exchange rate losses. Back in 2008 when the peso was also appreciating versus the dollar, we wrote an article on How to deal with the falling dollar. This might still be helpful today.
The closing rates of the Philippine Peso versus the US Dollar at the end of the years 2007, 2008 and 2009 are as follows. It seems that the peso would end the year 2010 higher than last year’s closing exchange rate.
Philippine Peso – US Dollar Exchange Rate
End of Years 2009, 2008, 2007
- Peso-Dollar Exchange Rate, end-2009: P46.356 : $1
- Peso-Dollar Exchange Rate, end-2008: P47.52 : $1
- Peso-Dollar Exchange Rate, end-2007: P41.28 : $1
- Peso vs. US Dollar in 2009: Up +2.45% (Peso appreciation)
- Peso vs. US Dollar in 2008: Down -15.12% (Peso depreciation)
- Peso vs. US Dollar in 2007: Up +18.8% (Peso appreciation)