Peso seen to hit 46:$1

The peso is expected to strengthen and even reach 46 to a dollar in the months leading to the elections, Philippine Chamber of Commerce and Industry (PCCI) president emeritus Alberto P. Fenix Jr. said yesterday.

Fenix, in a recent PCCI press conference, said dollars usually come in during the election year. "The peso will strengthen over the coming months," Fenix said.

Fenix said exporters are hoping that the peso will close at 49.50 to $1 by year end. According to him, they expect the currency to "normalize" as early as after the scheduled May national elections.

At yesterday’s trading at the Philippine Dealing System (PDS), the peso went down by 25 centavos to close at 48.75 from Tuesday’s 48.50 to $1.

Fellow exporter and PCCI Honorary Chairman Sergio R. Ortiz-Luis for his part said they are hopeful the exchange rate will reach 49.50 to $1 soon. "We hope it will happen soon enough so we will enjoy better exchange rate."

Ortiz-Luis explained some small and medium sized exporters resorted to cutting orders to cope with the peso dollar exchange rate.

Ortiz-Luis, said they are not happy with the export projection specifically in the electronics sector which is limited to only five to 10 percent. "Electronics cover two-thirds of exports but only accounted for eight percent of last year’s 14 percent growth brought in by other sectors."

In 2006, exports grew 14 percent to $473 billion, outpacing the government’s growth target of 10 percent. Unfortunately, weak electronics shipments saw Philippine exports fall 3.8 percent from a year earlier to 3.68 billion dollars in December, the first downturn in 13 months.