PHL outlook buoys peso

Optimism about the Philippine economy kept the peso buoyant against the dollar on Friday, extending its rally for the second consecutive day.

The peso gained 10.5 centavos to close the week at P47.515:$1 from 47.620 Wednesday. Philippine financial markets were closed for a national holiday on Thursday.

"The Philippine peso appreciated against the US dollar as confidence in the Philippine economy improved after several reports were released," Cherica Y. Vicente, research analyst at MetisEtrade, said in an emailed commentary.

The local currency drew its strength from reports that the Philippine Stock Exchange (PSE) remains confident that corporations will continue to raise money from the market this year.

"We foresee a potential increase in capital-raising activities after the Philippine elections, and we hope the volatility becomes more tempered as investors get more clarity on the impact of global developments on our market," PSE President and CEO Hans B. Sicat said earlier.

Vicente noted peso was also supported by expectations that inflation will improve in the coming months.

The Department of Finance (DOF) noted in a bulleting that inflation would remain manageable this year.

"The positive outlook on the Philippine economy influenced the peso to strengthen," Vicente said.

Week-on-week, the peso is ahead by a marginal 1.5 centavos from P47.665:$1 on February 19. Year-to-date, however, the peso has softened by 45.5 centavos from 47.060 on December 29.

"The peso moved sideways in a tight range vis-a-vis the US Dollar all week, hardly appreciating as markets considered the generally good US economic data releases in contrast to the Fed's dovish commentary," BPI Asset Management said in a separate commentary. – Jon Viktor Cabuenas/VS, GMA News