Mobile Alerts  Newsletter  RSS  Archives  About Us  Bookmark Us  Twitter GMANews.TV
Business

Peso to hit 37.2:$ in 2008 as remittances pour in - HSBC

Email the Editor Print | | More
Investment lender HSBC said Thursday it expects the Philippine peso to surge to as high as P37.2 against the US dollar this year, due to strong foreign exchange inflows from overseas Filipinos and investments.

However HSBC said, the strong local currency will accompany a slowdown in the country's economic expansion. The lender said the Philippines' gross domestic product will only grow 5.9 percent in 2008, after expanding more than 7 percent in the first three quarters of 2007.

HSBC said average inflation for the year will be 4.1 percent.

"We are quite bullish about foreign investments this year particularly in the services sector such as business process outsourcing and tourism development," Frederic Neumann, HSBC economist, said.

Neumann said the peso is likely to see more upside this year as the economy still has room for a stronger local currency. In face of surging foreign exchange inflows following drastic cuts in US interest rates, Neumann said the Bangko Sentral ng Pilipinas will likely tolerate further appreciation of the peso.

The US Federal Reserve's 75 basis-point rate cut, and successive cuts across the globe resulting from that move, is expected to release even more liquidity into the financial market and Neumann said these funds would go straight into Asia.

"We are looking at a process where foreign exchange would flood into Asia because of lowering interest rates in the US," Neumann said.

Neumann said the inflow of remittances from overseas Filipino workers would also be sustained this year and this would support an even stronger peso.

"That would put the pressure on the peso and we believe that the central bank would take a very pragmatic view," Neumann said.

However, Neumann said that an appreciation of the local currency to P36:$1 or even higher to P35:$1 would be a burden to the economy.

But Neumann said the peso's strength is more if a political issue than an economic one, seeing that overseas Filipinos, the main contributors to the local economy's growth, are the hardest hit by a stronger local currency. - GMANews.TV
Email the Editor Print | | More
READER'S FEEDBACK:
From: Han in Tel Aviv, Israel
Sent: Friday, January 25, 2008 12:26 AM

Wow! Congratulations, tumataas ang piso pero according to what we know back home still the prices are still high. Yeah they will increase the price of gasoline and then later withdraw. There is no really rolling back of prices. Yeah it takes time to see the effect of the economy that is growing but still how many years do we have to wait?

We're so freaking tired of being a caregiver or maid or being a servant to other foreigner.

How long will the government to do something? They are just waiting for the dollars to flood in. Do something. Don't just sit in your comfortable zone. Do something because we're so sick of being away from home.

From: Jojit Sese (dlsese@yahoo.com) in Georgetown, Cayman Islands
Sent: Friday, January 25, 2008 2:08 AM

As an OFW, I really felt bad when I read your article on "Peso to hit 37.2:$ in 2008 as remittances pour in - HSBC".

However, as I go on reading it including the reasons, I am kinda relieved. However, in a perspective of an ordinary Filipino, how would he react to it?

Although, I do understand that a stronger peso relates better for our economy only but did we realize what kind of economy are we talking about. Are the prices of commodity affected? They are indeed affected but prices is going up but not down. Is this the economic benefit we talked about?

Yes, I know that we don't have control in the world oil prices but how would an ordinary Pinoy feel the improvement in the economy to his life? Again, is this the economy we are talking about that?

Industries definitely are still recuperating from the Asian financial crisis in the 1990's would surely reap the benefit.

However, how would the private employees of the industrial sector get the benefit from a stronger peso?

Somebody might forget that these employees helped their employers tighten their belt during those crisis through cost reduction measures. Is this the economy we are
talking about?

Neumann message should be read by all government institution so that the benefit of a strong peso be felt by an ordinary Pinoy.

Would the ordinary Pinoy afford his medicine? Can he buy a cheaper and good quality NFA rice? Can he afford to visit his relatives in far places because the bus fares were affordable? Can he be receiving a smile from a government employee when he inquires or ask for their services? Can the employers feel a better security of their business? Can schoolchildren take class inside a standard room and not under the tree?

So much to say on the effect of a stronger peso, so muck to be done but I hope and pray that everyone should avoid pointing each other who would do this for the ordinary Pinoy before it will only become a waste.

God bless our beloved country! Mabuhay!
Other Business stories
US stocks fall for 3rd day as dollar strengthens
11/21/2009 | 12:25 PM
Stocks fell for a third straight day Friday as a disappointing outlook from computer maker Dell Inc. suggested that an economic recovery could be uneven. The major indexes all had moderate losses,... More
Anchor Land profits surge on strong sales, completed projects
11/20/2009 | 09:23 PM
Anchor Land Holdings Inc., an upscale real-estate company, said earnings surged by more than half as it increased sales and completed more projects. More
Malaysian economy shrinks at slower rate
11/20/2009 | 08:39 PM
KUALA LUMPUR - Malaysia's economy shrank 1.2 percent in the third quarter, an improvement from the previous two quarters as the financial services and construction sectors gained strength,... More
Sony bets new online service to boost brand loyalty
11/20/2009 | 08:31 PM
TOKYO - Sony's new online service connecting the whole range of its gadgets to downloadable content like movies and games should help build brand loyalty, a top executive said Friday. More
AirAsia earns from rising passengers, add-on services
11/20/2009 | 08:27 PM
KUALA LUMPUR, Malaysia - Budget carrier AirAsia said Friday its net profit totaled 130 million ringgit ($38.4 million) in the third quarter, buoyed by rising passenger numbers and income from... More
EU extends antitrust review of Oracle's takeover of Sun Microsystems
11/20/2009 | 08:24 PM
BRUSSELS - European Union regulators said Friday that they have extended until January 27 a deadline to wrap up their antitrust review of Oracle Corp.'s planned $7.4 billion takeover of Sun... More
Nokia sheds jobs in Finland as it struggles to cut costs
11/20/2009 | 08:22 PM
HELSINKI - Nokia Corp., the world's largest mobile phone maker, said Friday it is axing 330 jobs at research and development units in Finland and Denmark as it continues to struggle to cut... More
Banks' bad debt ratio declines to eight-year low
11/20/2009 | 06:44 PM
Soured loans of universal and commercial banks fell to an eight-year low as the industry continued to lend steadily, the Bangko Sentral ng Pilipinas reported on Friday. More
Land Bank extends bigger loan to priority sector
11/20/2009 | 06:23 PM
State-owned lender Land Bank said loans extended to its priority sectors rose by nearly a fifth as of end-September. More
GSIS asks regulator to delist MPIC shares
11/20/2009 | 06:02 PM
State-run Government Service Insurance System asked corporate regulators to suspend the trading and delist shares of Metro Pacific Investments Corp., the local unit of Hong Kong conglomerate First... More
ADVERTISEMENT
Britney's ex-bf, Adnan Ghalib, gets 45 days in jail
2009-11-21 11:43:25
LOS ANGELES — Britney Spears' ex-boyfriend Adnan Ghalib is being sent to jail for 45...
Alleged burglar warms up bottle for crying baby
2009-11-20 12:22:12
INDIANAPOLIS – An 18-year-old is in police custody after he warmed up a bottle for a crying baby...
Pinoy kids from 'down under' retrace their roots
2009-11-20 04:27:17
A new generation of Filipino-Australian kids are spending their time learning everything about...
Obama answers top Cuban blogger
2009-11-20 00:42:54
HAVANA – President Barack Obama has answered written questions from a Cuban blogger who has...