"The earnings coming out are adding to the optimism that the economy is moving forward and that better numbers will be coming out," said Erick Tan of the Bank of the Philippine Islands (BPI).
Some analysts said the peso and the stocks also got a boost after the government’s latest bond offer received a strong response in what was seen as a vote of confidence in the country.
They said demand for the country’s last debt issue this year reflected upbeat sentiment towards the government’s improving fiscal position, helping the peso hit its highest close since May 10 this year and the stock market to its highest level in more than two months.
The peso gained by another 21 centavos to settle at 51.53 from Wednesday’s close of 51.74 to the dollar.
Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr expressed optimism the peso will prove resilient against market volatility as the steady inflows of foreign investments and remittances continued to bolster the country's international reserves.
At the Philippine Stock Exchange (PSE), the benchmark 30-company index surged 47.29 points, or 2.1 percent, to 2,336.42, marking its best finish since May 22. Thursday’s rally brings the total index gain to 4.2 percent since Tuesday, the day after Mrs. Arroyo’s state-of-the-nation address.
"There’s a recovery in risk appetite for the Philippines and investors are coming back," said Craig Chan, a strategist at Royal Bank of Scotland Plc in Hong Kong. "Local fundamentals are looking good."
"We have learned to invest in the country based on fundamentals regardless of the political noise," caused by calls for Mrs Arroyo’s ouster, Wealth Securities analyst Ricardo Puig asid.
"President Arroyo acknowledged that there was a fiscal crisis and she fixed it. Now she has a plan, and all the government projects lined up are economically productive," he added.