WASHINGTON - There is still room for improvement in the peso-dollar exchange rate currently hovering at P47.95 to $1, Finance Secretary Margarito Teves said here.
If economic fundamentals remain strong, "the peso has room for improvement and is likely to improve. But I cannot predict an exact number," Teves told *The Manila Mail* in an interview.
Strong fundamentals include low interest rates and low inflation, currently about 2 percent, a reduced deficit and healthy international reserves now standing at about $24 billion, enough to support five months of imports, said Teves during a visit to Washington for the annual meetings of the World Bank and the International Monetary Fund.
He said the Philippines was hopeful of
signing a compact with the US government’s Millennium Challenge Corp. (MCC)
sometime next year to raise $300 million to $500 million for economic and
social development projects.
The country was making good progress in
meeting benchmarks that should enable it to graduate from the “threshold” of
becoming fully eligible for MCC assistance to a compact partner, he said.
“We believe we are meeting all the
requirements to bring ourselves to the next level and the informal feedback we
are getting from them is very favorable. But, of course, we don’t see the
complete picture in the sense that other countries may be doing much better
than us and since only a limited number can go up to the compact level we may
not even qualify," he said.
Teves said the Philippines would submit a final performance report
to the MCC later this year.
The Philippines received a two-year, $21-million grant
from the Millennium Challenge Account in 2006 to improve its record in the
areas of just and democratic governance, economic freedom and investing in the
health and education of its people.
The account was set up by the Bush
administration in January 2004 to encourage developing countries to adopt good
policies that promote poverty reduction and growth.
Sixteen indicators, including rule of
law, civil liberties, control of corruption, inflation rate and trade and
fiscal policy, are used to determine the degree to which the political and
economic conditions in a country serve to promote broad-based sustainable
economic growth, thus making it eligible for MCC assistance.
Teves said his optimism was based on the
progress made by the Philippines in meeting MCC benchmarks and because
the initial records that the corporation used in assessing the situation in the
Philippines were based on outdated data.
MANILA – The secod week of this month, the peso
hit the P47 level yesterday (Tuesday), recording another fresh sixth-year high,
driven by heavy remittance flows, as well as surges in the bonds and equities
market, Bangko Sentral ng Pilipinas (BSP) said.
At
the Philippine Dealing System (PDS) the peso closed at P47.950 to the dollar
yesterday, which appreciated from P48.05 in Thursday’s trading last week.
The peso opened on Tuesday at P48 and
rose to a high of P47.940 and low of P48.025.
This was the peso’s best finish since March
8, 2001, when it
closed at 47.91. On March 9, 2001, it hit an intraday high of 47.83 a
dollar.
This is not the only piece of good news
yesterday.
The central bank also said that the Philippines recorded significant growth in its
foreign direct investments (FDI) inflow year-on-year in January 2007,
particularly in the manufacturing, services, real estate, financial
intermediation and construction sectors.
By Jose Katigbak
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