Peso to stabilize at 47-48 to $1 — Cuisia

Former Central Bank Governor Jose L. Cuisia Jr. has expressed confidence that the peso will stabilize at 47 to 48 to the dollar.

"I am confident that the peso will stabilize and improve although it would take a few weeks as there are sectors taking a wait-and-see attitude towards the new dispensation," Cuisia, who is now president and chief executive officer of the Philippine American Life and General Insurance Co. (Philamlife), said.

From a low of 54.32 to the dollar last week, the peso has improved considerably, hovering between 47 and 49 to the dollar over the past few trading days.

Foreign exchange (forex) traders said the benchmark for a realistic value of the peso is the Thai baht, which is currently trading at 43 to the dollar. As a strategy to make Philippine exports more competitive, monetary authorities normally aim for a peso that is valued some one or two pesos lower than the baht.

Cuisia expressed optimism that the economy will rebound with the return of investor confidence, but he warned the public against letting their expectations go too high.

"You can not expect that the problems of the economy will be resolved overnight. There is still a large public sector deficit, which the new government will have to address," Cuisia said during the launching of Philamlife’s business center in Binondo.

Meanwhile, Cuisia said Philamlife is projecting a 20-percent growth rate for the company this year after missing its targets in 2000.

"Considering the way our economy has performed last year, our year 2000 performance of a little below 20 percent was satisfactory," the chief executive said.

He said subsidiaries of Philamlife will register bigger growth rates as the economy is seen to be moving positively. PhilamCare is projected to grow by 35 percent while PhilamPlans is looking at a modest 38-percent growth this year.

Philamlife has been the perennial market leader in the life insurance industry. Premium income in 1999 reached P6.34 billion while first year premiums in the same year reached P1.417 billion.

It registered the best annual growth rate of 2.10 percent in 1999 among the 40 life insurance companies in the country. It has 150 offices and 5,800 agents nationwide.