Peso seen at P41.50:$1 this year

Peso seen at P41.50:$1 this year

 
In spite of the continuous strengthening of the Philippine Peso, London-based Barclays Capital says it sees the the peso at P41.50 to $1 instead of P40 to $1 this year. This is because of the continued increase in global oil prices.

According to the latest research note of Barclays Capital economist Prkriti Sofat, the investment bank is now expecting a lower balance of payments (BOP) surplus in light of higher oil prices.

Sofat also said Barclays Capital also lowered its BOP surplus forecast to $10 billion due to the rise in oil prices that would weigh on the trade balance and result to lower portfolio flows. Its earlier forecast was $13.5 billion.

Last year, the Philippines BOP surplus surged to a record of $14.4 billion because of the remittance of overseas Filipino workers (OFWs), as well as the strong foreign capital inflows. But Sofat said that the rising inflation differential would limit the appreciation of the peso against the US dollar this year.

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