Many economists think the weakness of the Philippine peso will persist through 2018, no thanks to an expected more hawkish stance by the U.S. Federal Reserve.
Even, the Bangko Sentral ng Pilipinas has said it has allowed a modest and gradual depreciation of the peso as part of an adjustment “to protect the economy.”
As some analysts project the peso could slide to PHP 55 against the greenback, investment managers like Astro del Castillo, managing director of local stockbroker First Grade Holdings, are looking for opportunities to take advantage of the peso’s retreat that could sap some strength from the rallying local stock market.
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Shifting funds to U.S. dollars may lessen the currency risk and even result in some exchange rate gains. But foreign currency deposit units pay very little interest while investing in dollar-denominated bonds of the government require a fairly large amount.
Mr. Del Castillo said an alternative for those seeking better yields and realize potential foreign exchange gains is to place funds in the fledgling dollar board of the Philippine Stock Exchange. And for overseas Filipino workers, such investment products are a good fit given that their incomes are in foreign currency, he added.
