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Philippine central bank confirms OFWs' fears of stronger peso

DUBAI — The Philippine central bank, Bangko Sentral ng Pilipinas (BSP), has confirmed forecasts for a continued stronger peso against the US dollar, a situation that has been making Filipino workers in the UAE to shell out more dirhams for their fixed monthly remittances.

BSP Deputy Governor Diwa Gunigundo yesterday told exporters in a Manila forum that the peso would appreciate further against the greenback in the near term, despite jitters from rising oil prices, the US credit crunch and the occasional BSP currency intervention.

"The peso is expected to remain firm for the rest of the year on the back of sustained dollar inflows from overseas Filipino remittances, portfolio and foreign direct investments and export receipts," she said.

The peso saw new gains against the dirham yesterday as it appreciated to 12.14 following Wednesday's depreciation of 12.17. On Tuesday, the peso touched a two-month high against the dirham at 12.09 to extend its gaining streak for the past few days, prompting Filipino workers in the UAE to tighten their belt.

Based on the latest peso to dollar forecast by French banking giant BNP Paribas, the Philippine currency would continue appreciating against the dirham 11.68 by yearend, 10.05 by next year and 8.15 by end-2009.

Dubai-based Filipino bankers said that a surging peso against the dirham does not mean a decline in remittances because OFWs send fixed amounts to their families every month. OFWs send more dirhams to offset the diminishing exchange rates, they said.

Remittances by OFWs in the UAE grew by 11 per cent to Dh185.42 million in July from Dh167.26 million in June. This brought to Dh1.2 billion the total remittances from the UAE for the first seven months, an increase of 57.1 per cent from Dh759.5 million over a year ago.