Peso continues to gain, closes at 51.22 to a dollar

The peso continued to gain against the dollar yesterday, rising by another 16 centavos to close at 51.220 – its highest in 43 months – on the back of strong dollar inflows and improving market sentiments.

Overseas fund managers may bet that President Arroyo will be able to keep up with her policy to bolster economic growth, said Marcelo Ayes, head of foreign-exchange trading and derivatives at Equitable PCI Bank.

The peso has risen 1.9 percent this week after Standard & Poor’s maintained its debt ratings outlook on the Philippines.

"There’s no change to the government’s reform programs," said Ayes. "As political tension subsides, people focus on the fundamentals and it looks like the peso is still heading higher."

The currency dropped 1.1 percent on Feb. 24 when Mrs. Arroyo imposed a state of emergency amid a plot to oust her. That was the biggest decline since July 26, 2002.

The peso opened strong at 51.30 before touching a high of 51.210 to the dollar.

Traders said the market welcomed the announcement by Justice Secretary Raul Gonzalez that conditions were right to lift the state of emergency.