Sunlife Sees Philippine Peso Strengthening to 55 Per Dollar

Sunlife Sees Philippine Peso Strengthening to 55 Per Dollar

Article content

(Bloomberg) — The embattled Philippine peso will probably strengthen to 55 per dollar by the end of the year, implying a gain of more than 3% from its current level, according to Sunlife of Canada Philippines Inc.

“We see the peso appreciating toward the end of the year due to seasonal inflows such as remittances,” Valerie Pama, chief asset management officer, said in an interview on Tuesday. “That will help balance the import demand for dollars.”

Article content

Funds sent home by Filipinos working abroad typically rise as the year-end holidays approach, helping the peso advance in the fourth quarter in five of the last six years. The peso, which closed at 56.78 per dollar on Tuesday, slid almost 4% in the past six months as the dollar’s dominance weighed on emerging-market currencies.

Bangko Sentral ng Pilipinas forecast remittances will rise to about $33.5 billion this year, making the funds among the nation’s largest sources of foreign exchange. The central bank will most likely succeed in defending the 57-per-dollar level as it has ample foreign-exchange reserves, said Pama, who helps manage around $1.2 billion of assets in Manila.

Sunlife is more bullish on local bonds than stocks for 2024 as inflation is expected to ease and could prompt the central bank to cut interest rates in the second half of next year. While the company is neutral on the fixed-income market now, it is watching out for good entry levels, Pama said.

“We would start accumulating, to be prepared when that tipping point happens,” Pama said. “For stocks, we’ll need to see foreign fund flows come in.”

See also  Thai Economic Recovery in Line With Expectations: Sethaput

Share this article in your social network

Leave a Reply

Your email address will not be published. Required fields are marked *