Peso seen hitting Php44: $1

May 24, 2007 by reyna20
Filed under: Uncategorized

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Hmppppttt!!!

If there is ever something in this news that I am excited about, it’s the news that finally there will be a centralized credit bureau in the Philippines. It’s about time! But then again, given Pinoy’s unbelievable ability to tweak things, our beyond the world ability to be creative taking cue from all our corrupt models, who knows what this credit bureau will crank out. Would it be similar to Maguindanao vote? I mean, I would like to have a fantastic credit rating, you know!

In any case, here’s more bad news to us Overseas Pinoy Workers!!!

Peso seen hitting 44:$1

MANILA, Philippines — Standard Chartered Bank expects the peso to strengthen further to about 44 to the dollar, given what it calls a “good” election turnout and a “frothing” domestic economy, bank chief executive Eugene Ellis told the Inquirer.Ellis also said the British bank was keen on expanding its business in the country — such as through a foray into small and medium-scale enterprise lending and mortgage lending — to take advantage of opportunities.

“All the fundamentals are excellent,” he said at the sidelines of the signing of a P5-billion local bond float by the Asian Development Bank.

The peso on Tuesday broke into the 45-per-dollar level to reach its highest exchange rate in nearly seven years. Ellis said, “We see it going [into] another big figure.”

He agreed that the currency would extend its gains toward 44 to the greenback before succumbing to technical correction. “The fundamentals are all in place for the Philippines and we must seize the opportunity,” he said.

On Wednesday, the peso retreated from Tuesday’s close of 45.87 to the dollar and finished at 46.04. But currency traders said strong foreign buying of Philippine stocks and heavy inflows of foreign exchange from overseas Filipino workers ahead of school opening in June continued to support the peso.

The peso’s slight pullback was widely expected because the US dollar had reached oversold levels in the past few days, traders said.

Ellis meanwhile said Standard Chartered would stick to its strategy of wholesale lending in the Philippines, citing its participation as lead arranger of the ADB peso bond float.

He said Standard Chartered expected to arrange about three more financial deals of about the same size within the year.

When asked whether corporate demand for credit was picking up after years of sluggish growth, Ellis said: “Absolutely. There are large corporations going to the market, and there are a few more [credit deals] coming up.”

To venture into lending to small and medium-scale enterprises, Standard Chartered is also awaiting the launch of a centralized credit bureau in the Philippines, he said.

Tags: Business & Economy, Money & Currency

Comments

5 Comments on Peso seen hitting Php44: $1

Manuel L. Quezon III: The Daily Dose » Blog Archive » Lanao invasion on Fri, 25th May 2007 3:33 am

[...] Reyna Elena thinks a a centralized credit bureau’s a good idea. [...]

reyna elena on Fri, 25th May 2007 11:25 am

Hmmm… was that you MLQ3?

Yeap, I do. It’s not only a good idea, it’s a much better idea than the current estafa cases that you file each time you issue a bounced check.

The idea is simple and it works very well around the world except the Philippines. As you create debt, pay and manage your debts, you get rated how good a customer you are. So, the higher your credit rating, that means, that you are a good payor. This way, we can eliminate yong mga estafador sa society and create an honest and trusting business environment.

Downside is that, we Pinoys, as I have said already are waaaaaaaaaaayyyyyy tooooo corruply innovative and creative.

[Reply]

vic on Fri, 25th May 2007 12:33 pm

reyna elena,
Is the peso really getting strong or the U.S. dollar losing its strength? Is the peso also gaining against any other foreign currency? Just wondering, because only two or three years ago our dollar (Canadian was worth only in the $0.70 and now it is hitting $0.90 to a U.S. dollar and our Economy just stable, except that we are not incurring deficit, but that was been going on even for a while now. So I think the U.S. is the one losing strength instead, because of the accumulated deficits, especially now that she has to keep financing that expensive war in the middle east and Afghanistan.

[Reply]

reyna elena on Fri, 25th May 2007 10:25 pm

Vic,

Thanks for stopping by!

Economic pundits will disagree with me, but I certainly believe that the US Dollar has been losing ground ever since. And if this meltdown continues we will soon be experiencing what people experienced during the Great Depression!

Here are my reasons:

1.) The world’s currency of choice now is not the US Dollar anymore, rather, the Euro. Did you notice that? Did you notice how many countries have already started junking their reserves to euro? If I may remember this right, I think the Philippines is also one of them, am I right? The latest I read was Indonesia is switching from the dollar to the euro ang get this, even Ecuador dumped $2.3 billion from its national reserves, converting to competing currencies – not the US dollar! I mean, when you read those news that they don’t like the US dollars, you begin to think! What’s going on? You want some more proof? Russia’s gas are priced in Euros not US dollars, but then again, they’re pissed at Bush, so maybe that’s political What about this, did I hear that Saudi Arabia is also demanding Euro payments for its oil contracts?

2.) Next, where’s the world’s financial center now? Everyone think it’s New York, but even New York might be losing ground to London where all the Middle Eastern monies are now being funneled. Partly 911 but I believe it has got a lot to do with the Sarbanes Oxley. Sarbox is an unbelievably expensive and restrictive for new businesses (especially if you’re a small one) which is why most businesses don’t do IPO’s in New York anymore! There are a lot of better bourses in Europe and in Asia that are not sanctioned by the expensive Sarbox.

3.) Exactly what you said, political stability or geopolitical antagonism towards America – I mean, there’s been a growing belief that the US dollar is no longer the prime investment as it used to be. It used to be that wealthy people or at least those people with monies look for America as a safe haven. But after 911 with all the money laundering rules, it’s unbelievably scary! Are we still viewed as a safe financial haven? I don’t think so.

4.) Trade deficit? I don’t think you can stop Americans with our voracious appetite to import, import and import and as you can see, we don’t produce here no more. Ok, that’s too much of a statement. We do produce but not as much as before, although our economy has now moved to service, right? So, we import like crazy. We are just too hooked on low priced products from China, Indonesia, India and all of Asia and even the Philippines!

5.) What about our housing troubles? This was started many many years ago during the housing boom. You see, during those times, there were just a lot of unscrupulous people trying to cash in and milk the sub-prime market (people with bad credit records) and loan them monies with extra fee. It’s that extra fee that they were after. Now, you have all of these sub-prime mortgage, bundled into one investment, sold to investors who are now not getting anything from their invested capital because everyone else in the sub-prime market has gone bankcrupt.

So, to answer your question? Yes, the US dollar has been losing its strentgh and I have not even discussed the speculation part.

Now, your other question - is the peso really getting strong?

Watch out for my next post. I am doing my own unscientific analysis.