Philippine Peso, this week’s least loser among emerging Asian market
Jan 11, 2016 09:21 AM EST
The Philippine peso dropped the least among emerging-market in Asia this week as its overseas workers and outsourcing industry shielded it from the Chinese economic slowdown and increase in US interest rates.
According to Bloomberg, prices from the Bankers Association of the Philippines shows that the peso fell by 0.2 percent this week, losing 0.3 percent to 47.155 a dollar. For the past year, it decreased 4.5 percent. Bloomberg surveys projects the Philippine economy to grow by 6 percent this year, out pacing the rest of the developing-countries in Southeast Asia.
Philippines' strong economy is bolstered by remittances from the increasing business-process outsourcing companies and overseas workers. Bangko Sentral ng Pilipinas Governor Amando Tetangco said Thursday that the country has buffers against risks from the economic slowdown of China, rise in US interest rates, and the volatility of oil prices.
"We are closely watching developments in China - the policies and intent of such," said Tetangco in a report by Manila Bulletin. "There is no exact science to policy making because a large part of its effectiveness is hinged on market sentiment."
"Investors still need to search for the best hedges to a widely-anticipated strong U.S. dollar scenario and I think the Philippine story is still the best in the region," said Bank of the Philippine Islands foreign-exchange trading head Alan Cayetano. "We are still susceptible to further peso depreciation but we have a good chance to outperform most of our Asian peers in the medium term."
In a report by Channel News Asia Tetangco emphasized that it is important for the country to keep sound fundamentals and be strategic in its presence in the market. He said that they are aware of China's measures to ensure more sustainable growth, which will be beneficial in the long term.
Meanwhile, the yield on the government bonds dropped one basis point to only 4.11 percent, as reported by the Philippines Dealing & Exchange Corp. This week, the yield went up by one point.