Peso starts year stronger at 45.95:$1

MANILA, Philippines - Strong remittances from overseas Filipino workers (OFWs) during the Christmas season helped the peso breach the 46 to $1 level, analysts and traders said yesterday.

The peso strengthened to 45.930 to $1 before closing to its strongest level in 16 months at 45.950 to $1 or 25 centavos stronger than the closing of 46.20 to $1 last Dec. 29.

Yesterday’s close was the strongest since Aug. 29, 2008 when the peso touched the 45.925 to $1 level.

The peso opened at 46.210 and weakened to an intra-day low of 46.310 before closing at 45.950 to $1.

Volume of transactions amounted to $991.65 million from $604.52 million last Dec. 29.

Traders attributed the peso’s strong performance against the dollar to the robust OFW remittances last month.

December, according to traders, is usually strong remittance month as Filipinos abroad send more money to their loved ones for the Christmas season.

Instead of a zero growth, the BSP expects OFW remittances to increase by four percent to a record $17.1 billion last year from $16.4 billion in 2008. This year, the central bank sees the amount of money sent home by Filipinos abroad rising by another six percent.

Latest data released by the BSP showed that OFW remittances climbed by 4.5 percent to $14.321 billion from January to October last year compared with $13.707 billion in the same period last year.

Last year, the peso gained 2.8 percent to close 2009 at 46.20 from 47.520 to $1 in 2008 due mainly to the weakening of the dollar.

First Metro Investment Corp. (FMIC), a unit of the Metrobank Group, sees the peso averaging at about 46 to $1 this year.

On the other hand, Rizal Commercial Banking Corp. (RCBC) senior vice president for financial markets Marcelo Ayes said the peso would trade between 45 and 48 to $1 this year.