Philippine peso expected to depreciate to 45 to a dollar by yearend

Manila (Philippine Daily Inquirer/ANN) - The peso may not always maintain a strong stance, as seen in recent weeks, and is expected to depreciate in the coming months, eventually trading at 45 against the US dollar by yearend, according to analysts.

Based on the latest projections of DBS Group and the partnership of First Metro Investment Corp. and the University of Asia and the Pacific, the peso is expected to return to the range of 43 against the greenback mainly due to domestic development problems, as well as lingering uncertainties abroad.

DBS revised its forecast for the peso, which it said would average at 45:$1 in the fourth quarter this year from the previous 42.50:$1.

The financial service provider based in Singapore also said that the local currency would further weaken in the third quarter when it would average at 45.50 against the dollar.

¿The peso¿s stability is dependent on pushing more reforms to sustain growth (even if) it has been stable since early 2011," DBS said, expecting the exchange rate to fluctuate within the 42-44 range.

¿The peso¿s resilience throughout the eurozone debt crisis was mainly due to the re-acceleration in real GDP growth to 6.4 per cent year on year in the first quarter of 2012," from less than 5 per cent of the previous year, the group added.

But despite these positive developments, the Philippines still needs ¿to address several structural challenges," particularly because growth is still too dependent on government spending, DBS said.

At the same time, FMIC and UA&P expect the local currency to weaken to an average of 43.27 in June, 43.453 in July and 43.34 in August, from the current 43:$1.

¿With deep uncertainties as to the impact of Greece exiting from, or remaining in the eurozone, the dollar will remain as a major safe haven," FMIC and UA&P said. ¿The peso will not be spared from this, and so the exchange rate should [depreciate] until the third quarter."

Last week, FMIC president Roberto Juanchito Dispo was quoted as saying that the peso could hit an average of 42 against the dollar this year because the recent drop in global oil prices would reduce the country¿s demand for dollars.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Pagasa: Drought may worsen
    Pagasa: Drought may worsen

    The drought in 12 already dry areas in the country is expected to worsen as the summer season peaks next month, the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) warned yesterday. In an advisory, PAGASA said the provinces of Albay, Bataan, Batangas, Biliran, Cavite, Cebu, Ilocos Norte, Leyte, Misamis Occidental, Pampanga, Zamboanga del Norte and Zamboanga del Sur will continue to receive “way below” or “below normal” rainfall in May. PAGASA defines …

  • Maximum restraint for Phl troops in West Phl Sea
    Maximum restraint for Phl troops in West Phl Sea

    The military has advised its pilots conducting surveillance in the West Philippine Sea to exercise maximum restraint even if they are being bullied by Chinese troops. Armed Forces spokesman Brig. Gen. Joselito Kakilala said all actions of the pilots should be consistent with the declaration of conduct signed by claimant countries. Armed Forces public affairs chief Lt. Col. Harold Cabunoc said the Philippines should remain on moral high ground when it comes to the territorial dispute. A …

  • MMDA simulates rescue march after quake, tsunami
    MMDA simulates rescue march after quake, tsunami

    The Metro Manila Development Authority (MMDA) yesterday led the annual rescue march from Quezon City to Manila, giving rescue volunteers a glimpse of possible scenarios if the metropolis is hit by a strong quake or is inundated by a tsunami. Cora Jimenez, MMDA general manager, said 700 volunteer rescuers walked from the Quezon City memorial circle to the Bonifacio monument in front of the Manila city hall to simulate a response-exercise to a magnitude 7.2 earthquake. Renato Solidum, …

  • Islamic State threatens Mindanao, Phl tells Asean
    Islamic State threatens Mindanao, Phl tells Asean

    Foreign Affairs Secretary Albert del Rosario bared yesterday before the Association of Southeast Asian Nations (ASEAN) reports of the Islamic State of Iraq and Syria (ISIS) threat to the Philippines through the Black Flag Movement in Mindanao. Speaking before ASEAN foreign ministers, Del Rosario said the ISIS threat to Philippine security is real rather than imagined because of the Black Flag Movement’s pledge of allegiance to ISIS leader Abu Bakr al-Baghdadi. …

  • ‘Chinese reclamation affecting Phl’s energy security bid’
    ‘Chinese reclamation affecting Phl’s energy security bid’

    China’s occupation and buildup of its military structures in the West Philippine Sea and South China Sea is causing the country’s top energy official to get the jitters as the encroachment is seen as a huge dent on the Philippines’ efforts to achieve energy security. “It is a concern but if we don’t bring it to the United Nations, where will we bring it? We cannot bang heads with them,” Energy Secretary Carlos Jericho Petilla told The STAR in an interview over the weekend. The US Energy …

  • Phl to Asean: China getting de facto control
    Phl to Asean: China getting de facto control

    The Philippines yesterday urged the Association of Southeast Asian Nations (ASEAN) to unite and stop China’s massive reclamation in disputed waters as it will give China “de facto control” over the area and cause $100 million in marine wealth losses annually. At the ASEAN Foreign Ministers’ Meeting here, Foreign Affairs Secretary Albert del Rosario told his counterparts that the situation in West Philippine Sea had worsened just a year after the Philippines began to draw international …

  • Gov’t spends P11.8 M for Noy’s Asean trip
    Gov’t spends P11.8 M for Noy’s Asean trip

    The government has allotted about P11.8 million for President Aquino’s attendance at the 26th Association of Southeast Asian Nations (ASEAN) summit in Kuala Lumpur and Langkawi in Malaysia from April 26 to 28. “President Aquino’s participation to the 26th ASEAN Summit is important as the region gears toward the creation of an ASEAN community, which is envisioned to provide new opportunities for the peoples of this region, including the Philippines,” Ochoa said in a statement. He was with …

  • Mary Jane: Shun drugs, get legit recruiters
    Mary Jane: Shun drugs, get legit recruiters

    As Mary Jane Veloso held on to vestiges of hope that her life might be spared, she thanked Filipinos for their support and had some pieces of advice.  Efforts to save Veloso from the firing squad continued after Indonesian authorities issued the notice of execution to the Filipina worker who had written four letters – including one for President Aquino – expressing hope that justice will prevail and her gratitude to her countrymen. Veloso’s relatives arrived in Nusa Kambangan Island on …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options