The Philippine peso is the only Asian emerging-market currency that forecasters have become more bullish on this year as the nation’s improving economy increases the chance it will win an investment-grade credit rating.
The peso will strengthen 4.2 percent by year-end, according to BNP Paribas, the most positive among 19 analysts surveyed by Bloomberg. The median estimate was for a 0.2 percent advance to 41.60 per dollar. It reached 41.358 on Sept. 17, the strongest level since April 2008, and is Asia’s best-performing currency over the past year. The peso rose 0.2 percent to 41.680 per dollar as of 9:53 a.m. in Manila, according to prices from Tullett Prebon Plc.
Indonesia’s rupiah rallied 20 percent in the three years before Fitch Ratings restored the nation to investment grade in December 2011. The prospect of the peso enjoying a pre-upgrade bump is luring investment and buoying the currency, said Thomas Harr, head of Asia local markets at Standard Chartered Plc, the second-most optimistic forecaster. Foreign funds have pumped $2.2 billion into local stocks this year, compared with $1.3 billion in 2011 and $1.2 billion in 2010, exchange data show.
“We think the Philippines will attain investment grade by 2014,” Singapore-based Harr said in a Sept. 14 interview. “You’ll see capital inflows coming into the country ahead of that.”
The Asian Century Report 