Peso seen to appreciate in coming weeks

All the country's economic managers are optimistic that the peso will appreciate in the next few weeks with the inflow of additional foreign investments.

This view was expressed separately by Finance Secretary Jose T. Pardo, Economic Planning Secretary Felipe Medalla and Bangko Sentral ng Pilipinas (BSP) Gov. Rafael B. Buenaventura.

Pardo revealed that the Ayala Group alone is expecting over $1 billion in investments this year.

In a letter to President Estrada, Jaime Augusto Zobel de Ayala II, president of Ayala Corp., said that the $1 billion foreign investments are composed of a $700 million investment of the Development Bank of Singapore in the merged Bank of the Philippines Islands and Far East Bank and Trust Co., and $350 million from Deutsche Telecom in the merger of Globe Telecom and Isla Communications Co. Inc.

For his part, Buenaventura said he expects a $300 million investment inflow into Philippine Long Distance and Telephone Co. by the Nippon Telephone and Telegraph of Japan, an investment in Manulife, plus the proceeds from the government's bond float.

The government is presently conducting a roadshow for a $1.7 billion bond float.

Medalla pointed out that the 50-centavo fall of the peso still shows that the country's economic fundamentals are still solid. He expressed confidence that the peso has "reached bottom" and will soon start improving.

Pardo said that the outlook of the government for the peso is still around P40 to $1, although the assumption used for budgetary purposes, was 41 to a dollar.

The peso broke the psychological barrier of P41 to $1 at intraday trading this week due to at least three factors: The continuing anxiety over another increase in US interest rates; a regional currency weakness; and the continuing scandal over the BW Resources stock manipulation and insider trading.

However, after a week-long depreciation, the peso appeared to be regaining strength, closing at P40.88 to $1 on Friday. -