Peso hits 31-month high of 53.03 to $1

The peso nearly broke through the 53 to a dollar psychological barrier yesterday, hitting a high of 53.030 during intraday trading on the back of continued strong dollar remittances from overseas Filipino workers (OFWs).

At the Philippine Dealing System (PDS), the peso closed at 53.080 to $1, its highest level since the peso last touched the 52.88 to $1 rate on May 27, 2003.

Yesterday’s closing rate was 10 centavos higher than Tuesday’s close of 53.180, bringing gains this year to six percent, according to the Bankers Association of the Philippines (BAP).

"I’ve heard that some Filipinos carried cash back to the Philippines and converted some of the money post-Christmas for the year-end celebrations,’’ said Leslie Khoo, a Singapore-based regional economist at Forecast Ltd. "The peso may rise to 53 to $1 this week," Khoo added.

At yesterday’s trading, the peso opened strong at 53.150 before hitting a high of 53.030 and a low of 53.160 to $1. Total transaction amounted to $259 million on an average rate of 53.067 to the dollar.

Remittances make up about a 10th of the local economy. The country is ranked third in terms of money sent home each year, after Mexico and India, according to the Asian Development Bank.

The Bangko Sentral ng Pilipinas (BSP) raised its full-year projection for the current-account surplus to $2.5 billion from an earlier estimate of $1.6 billion, on expectations of increased remittances from citizens living abroad in the last quarter.

The current account includes the balance of trade, remittances and other income from abroad.

The BSP said remittances from about 7.4 million Filipinos working overseas may rise as much as 20 percent to $10.3 billion this year and 10 percent in 2006.

Funds from Filipinos abroad in the first nine months rose 28 percent to $7.9 billion from the same period a year ago, the BSP said.

Analysts said with its strong showing, the peso is headed for its first annual gain versus the dollar since 1998.

They also said the peso is now the best performer among 15 Asia-Pacific currencies as the government implements policies to raise revenue and cut the budget deficit.