Economy / Philippines
Fundamentals Favour Gains
September 2006 | Economic OutlookBMI View: The Philippine peso has rebounded strongly after being battered during the Q206 EM correction. While oil-price related angst could pressure the unit in the short term, improving economic fundamentals, ongoing fiscal reform and attractive yield will prove supportive thereafter. We see the unit retesting 3¾-year highs around PHP50.83/US$, last touched in March, provided resistance at PHP51.10/US$ is breached. Our end-2006 target for the peso is PHP50.00/US$, while we see the unit trending to PHP49.00/US$ by end-2007.
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