MANILA - The peso rose further against the US dollar on Wednesday on the back of sustained positive investor sentiment that is benefiting Asian currencies.
The local currency ended Wednesday's trading at 45.65 against the greenback, 11 centavos stronger than the 45.76 finish registered Tuesday. Intraday high was recorded at 45.61, while intraday low stood at 45.78.
Volume of trade was up, amounting to $1 billion against the $735.24 million on Tuesday.
Traders said encouraging macroeconomic fundamentals were supporting optimism of investors on emerging markets in Asia, including the Philippines. In the country, outlook of an accelerated rise in the country's gross domestic product this year was further reinforced by latest report by the National Statistics Office on the country's exports.
The NSO reported Wednesday that merchandise exports reached $3.58 billion in January, growing by a hefty 42.5 percent from only $2.51 billion in the same month of last year. This was the fastest pace of growth in nearly 15 years.
Economists said the surge in the country's exports fulfilled projections that global demand, particularly from huge export markets that fell into recession last year, would recover this year amid improved consumer and business sentiments.
They said aggressive stimulus measures implemented last year by governments and central banks across the globe were already paying off.
In the case of the Philippines, Central Bank Deputy Governor Diwa Guinigundo said optimism of investors was translating into higher inflows of foreign investments, thereby boosting the value of the peso.
The Bangko Sentral ng Pilipinas reported Wednesday that foreign direct investments to the Philippines reached a net inflow of $1.9 billion in 2009, up from $1.5 billion in 2008 even if other countries fell the pinch of a global economic turmoil.
He said foreign investment inflows would likely increase further this year given projections of faster economic growth, and this should encourage the entry of more foreign capital inflows that should boost the peso even more.
"The appreciation of the peso is really brought about by higher investment inflows and the sustained growth in remittances," Guinigundo said.
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