Peso strengthens to 48.60

The peso strengthened against the dollar yesterday, supported by dollar remittances from overseas Filipino workers (OFWs) sent in time for the Christmas season.

The peso closed yesterday at 48.600 against the dollar, up 48 centavos from Friday’s closing rate of 49.080 against the greenback.

Marcelo Ayes, senior vice president of Rizal Commercial Banking Corp. (RCBC), said the local currency is getting support from OFW remittances which have started coming in for the holiday season.

“It’s remittance season again plus we’re running out of demand,” Ayes said.

He expects the peso to stay at the 48-to-the-dollar level this month until early January as Filipinos abroad are expected to continue sending dollars to their family in the country.

Ayes said the peso could appreciate to as high as 47.90 against the greenback this year.

Ayes said that despite the bleak economic outlook brought about by the global financial turmoil, Filipinos traditionally celebrate the Christmas season.

As such, Filipinos abroad would find a way to send dollars to their relatives at home despite the global economic slowdown.

Aside from dollar remittances from OFWs, Ayes said improving market sentiment and easing inflation have also contributed to the strengthening of the currency.

The inflation rate in November fell to 9.9 percent from October’s 11.2 percent, latest data from the National Statistics Office (NSO) showed.

Inflation stood at 11.8 percent in September 2008, after hitting 12.5 percent in August, its fastest pace in 17 years.

Ayes said that when the Christmas season is over, there is a risk that sentiment might again be affected by the bleak economic outlook.