Market dealers said strong remittances from abroad and the government’s improving fiscal performance help the peso’s appreciation.  The peso sustained its rally for a fourth straight session despite a two-day trading suspension last week due to typhoon Milenyo and the massive power outage that hit Manila and other parts of the main island of Luzon.

“The usual remittance story is behind this continued appreciation, along with the improvement in the government’s fiscal position and the Philippines’ balance of payments,” said Philip Wee, a currency strategist at DBS Bank in Singapore.

“We have entered the fourth quarter and remittances are typically stronger during this time of the year,” he added.  Teves though had no data to back up his statement saying it is just based on intuition.

He said the impact of typhoon Milenyo would be in the economic activity in Luzon, particularly in the Bicol Region but there are also “pambawi (alternatives)” in the next few weeks.

Teves said these “pambawi” include developments in the external sector, more exports, and higher revenues.

He said other factors to the peso’s improvement include rising exports, increased investments, improvements in the price of oil, the US decision to raise interest rates, and perhaps even a shift in the investments bound for Thailand to the Philippines.

The investments from Thailand are usually short-term such as in the stock market and there is still no clear indication that it would lead to foreign direct investments, he added.

The Finance chief said a better indication can be expected in the next few days when the stock market has recovered from the effects of the typhoon.

“The central bank made its presence to control the appreciation of the currency, as well as to beef up its reserves,” a Makati-based trader said. The trader said the central bank was seeking to keep the peso’s rise at 10 centavos a day as a 30-40 centavo appreciation was seen as too steep. “What the central bank wants is a stable currency so it will try to smoothen out the volatility,” the trader said.  Bangko Sentral Gov. Amando Tetangco said the peso was not as volatile as other currencies. “The peso volatility is in the middle of the range of the volatility of regional currencies,” Tetangco said. Traders said remittances provided the key support for the peso while demand was weak.

“The biggest bulk came from remittances sent for tuition fees,” said Jonas Ravelas, market strategist at Banco de Oro  Universal Bank.

“The positive market sentiment combined with a weaker dollar against the major currencies boosted the peso,” he said. Traders said fiscal developments have allowed the currency to sail ahead even when the dollar rose against other currencies Monday.

Traders said the peso is likely to further rise as it enters the last quarter, the time when remittances are at their peak due to increased spending for the holiday season.  “There’s some more room for it to go up to 49.80. But we’re near the inflection point of 50. Investors will take an opportunity to buy dollars so there might be a correction,” Ravelas said.

The pullback is 50.25-50.20, Ravelas said. Since January, the currency has gained nearly 6 percent, the third best-performing in the region after the Thai baht and the Indonesian rupiah, which have risen by 8.4 percent and 6.4 percent, respectively.