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Philippines Banksters At Least Trying to Restrain The Surging Peso...?

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Another angle on the rising strength of the peso is how it's affecting the huge BPO (call center) industry here. India's currency has remained quite stable this past year compared with the Philippine Peso.


Quote Bloomberg:


The Philippines intensified efforts to contain a surging peso, joining South Korea in clamping down on currency forward positions as monetary stimulus in the world’s biggest developed economies spurs capital flows to Asia.

The Southeast Asian nation imposed a ceiling for non- deliverable currency forwards for local lenders at 20 percent of capital, and 100 percent for foreign entities, Bangko Sentral ng Pilipinas said yesterday. South Korea said in November it would tighten caps on currency forward positions at banks.


Dec. 24 (Bloomberg) -- William Taubman, chief operating officer of Taubman Centers Inc., a U.S. real estate investment trust with 24 shopping malls, talks about the U.S. holiday retail season and the company's merchandising and growth strategy, and expansion in Asia. Taubman speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)


The benchmark Philippine Stock Exchange Composite Index advanced 0.2 percent to a record high.


The peso is the best performer in Asia after the Korean won this year, as Philippine growth exceeding 7 percent last quarter lured investors seeking better returns amid interest rates near zero and monetary easing in Europe, the U.S. and Japan. Excessive currency appreciation may hurt sales by exporters and service providers, complicating policy makers’ efforts to shield their economies from an uneven global recovery.

“We know the risk that it poses to the economy given that the Philippines is still quite trade dependent,” said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd. “For many Asian countries the question is how are they going to simultaneously manage capital flows and at the same time, if there are inflation risks, tackle these risks as well.”

South Korea’s government today lowered its growth forecasts for this year and for 2013, as Europe’s debt crisis caps demand for the nation’s exports. Gross domestic product will expand 3 percent next year, the Finance Ministry said in a statement in Sejong, less than the 4 percent predicted in September.

Philippine Growth

In the Philippines, GDP expanded 7.1 percent last quarter from a year earlier, helping stoke a gain of more than 6 percent in the peso versus the dollar this year. That’s the biggest jump after the won’s 7.5 percent increase among 11 Asian currencies tracked by Bloomberg.

While President Benigno Aquino is increasing spending and seeking investment in roads and airports to spur expansion, create jobs and reduce poverty, Economic Planning Secretary Arsenio Balisacan said last month the peso’s rise is a worry and will hurt exporters and overseas remittances.

“The current domestic operating environment has been greatly impacted by capital flows from overseas,” Governor Amando Tetangco said in Manila yesterday.


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