Macroeconomic Forecast Philippines

The Philippine peso strengthened considerably in July, surpassing its November 2010 high of PHP42.55/US$ to trade at PHP42.12/US$ as of July 28. The latest bout of strength in the PHP was in line with the broad appreciatory trend in Asian currencies, with the US dollar weakened by uncertainty surrounding the US debt ceiling gridlock in Washington. While a pullback beyond the immediate term may occur, we still see further strength in the peso towards the end of 2010. In short, we forecast the currency to appreciate to PHP42.00/US$ by December.

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