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By The SUN
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| The peso is forecast to strengthen further this year |
Good news for the Philippine economy, bad news for overseas Filipino workers who regularly send money back home.
The peso closed at Php48.065 to US$1 on Friday, its
strongest performance in more than four years, or since Sept 23, 2016, when it
closed at Php47.99 to the greenback.
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In Hong Kong, where the local currency is pegged to
the US dollar, the exchange rate is now down to Php6.20 per HK$1.
This was the second four-year jump for the peso. On Nov 9, it closed at Php48.145, the strongest since its Php48.10 close on Oct 20, 2016.
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Analysts say falling imports which have severely cut demands for the US dollar, plus the continuing inflow of remittances from Filipinos abroad, have combined to boost the peso’s value.
Other analysts attributed the peso’s strength to the
country’s all-time high foreign reserves, which stands at US$104.82 billion as
of end-December 2020, up by US$5 billion from November.
This was a second year of gains for the Philippine
peso, and a Bloomberg survey indicates it will rise further to 47.50 by the end
of 2021. The currency rose 5.4% last year, the biggest gainer in Southeast
Asia.
But the peso’s strength comes at a price. The Philippine economy is among the slowest to recover from the pandemic, largely because of falling imports and a big decline in domestic spending.
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