Pardo said such level could be attained next year due to the strong inflow of dollar remittances from overseas Filipino workers, foreign investments, and tourist arrivals.
At the same time, Pardo said dollar outflows have been minimized following the new policy of the government on duty-free imports.
According to Pardo, a P45-P47 to $1 exchange rate is realistic since the government’s peso-dollar exchange rate assumption for its 2001 budget is P44.50 to $1.
Pardo’s forex projection is more optimistic than that of Bangko Sentral ng Pilipinas (BSP) Gov. Rafael B. Buenaventura who said the peso could improve to a range of mid 48 to 49 to a dollar. Buenaventura had based his projection, likewise, on the continued inflow of OFW remittances.
He said the remittances would peak by February by which time government expects export earnings to kick in. He expressed hope that by that time, crude oil prices would also start to come down from the current $34 per barrel to just $32 per barrel.
The optimistic projections on the peso, though do not take into consideration the possibility that adverse political developments may occur. Before this month opposition to President Estrada grew.
In fact, foreign, exchange dealers said the loss of political confidence in the Estrada Administration caused the peso to fall much faster than its regional counterparts.
OFWs who had been waiting until the peso settled down, apparently were finally convinced that the peso would not go beyond P51 to $1 and started sending dollars to their relatives in the Philippines.
With more dollars, demand has been met, easing pressure on the peso to weaken.
However, analysts warn that if the ongoing impeachment trial is not resolved with finality and soon, market sentiment could again turn, sending the peso on another downtrend. Even now, the peso still skates around the P49 to $1 level.
After appreciating last week to P49.12 to $1, it just as quickly started losing ground and moved back to P49.49 to $1 before closing last Friday at P49.39 supposedly due to regional weakness led by the Thai baht. – Marianne Go