Bonus for expat Filipinos: Philippine Peso to weaken
The Philippine peso is expected to weaken early 2015 and trade in the range of 45 to a dollar threshold as the US economy strengthens boosting the greenback, resulting in overseas Filipino workers (OFWs) getting more peso for their remittances.
“The stronger US economy will boost capital flows into the US and keep the dollar stronger against the euro, yen and other currencies. The peso will not be able to resist the strong tide,” First Metro Investment Corporation and the University of Asia and the Pacific said in a report, stating the peso will average 45.19 to a dollar in January and 45.16 in February.
The peso averaged 44.95 to a $1 in November 2014, having weakened from the average 42.45 vs $1 in 2013.
The UAE is currently home to over 750,000 OFWs, with over 2.2 million Filipinos working overseas.
“Analysts surmise that the Bangko Sentral ng Pilipinas (BSP), the central bank of Philippines, has been intervening all these months to prevent the peso from breaking definitively the 45:$1 psychological barrier it probably has set for itself. But this may change with the onset of 2015,” the report said.
It added that the dollar strengthened against most of its counterparts as the US Federal Reserve moves towards having an interest-rate hike by second half 2015.
Separately, Business World online quoted BSP Governor Amando M. Tetangco, Jr. stating that improving growth prospects in the US will have “some” downward move on the peso.
He, however, said the fundamental strength of emerging economies, including the Philippines, remains a pull factor for investors to keep a portion of their portfolios in emerging economies.
Moody’s upgraded the country’s credit score to Baa2 with a stable outlook, up from its Baa3 rating with a positive outlook.
In December 2014, remittances from OFWs grew 6.7 per cent to $22 billion, BSP Governor said.
Besides, preliminary data from the Philippine Overseas Employment Administration said job orders reached 768,741 from January-October 2014, of which 39.8 per cent were processed job orders for service, production, and professional, technical and related workers in the UAE, Saudi Arabia, Kuwait, Qatar and Taiwan.
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