The Philippine peso has been the lone Asian currency to gain against the US dollar this month and is also the second-best performer in emerging markets worldwide, following the generally peaceful and credible elections in the Southeast Asian country.
That’s a contrast to April, when it dropped against all of its regional counterparts as Rodrigo Duterte, the front-runner in the presidential race, made a series of inflammatory comments before the May 9 exercise, Bloomberg reports.
Stocks are also rising, making the nation’s benchmark stock index the world’s fifth-best performer this month.
Having won the election by a landslide, based on the unofficial canvassing, Duterte says he wants to grant greater foreign ownership of businesses and will seek to eliminate corruption in the tax system.
“Duterte has conducted himself more as a statesman rather than a campaign brawler,” the media group quoted Joey Cuyegkeng, an economist at ING Groep NV in Manila, as saying.
“He’s now toning down and facing reality on what has to be done. Market-friendly actions would help sustain the peso’s strength.”
It’s an extra boost for a currency that already benefits from the Philippines’ current-account surplus, inflows from overseas workers’ remittances and revenue from the outsourcing of business processes, the report said.
The peso’s decline before the vote was “excessive” given those advantages, Khoon Goh, a senior foreign exchange strategist at Australia & New Zealand Banking Group Ltd. in Singapore, wrote in a note to clients a day after the election.
The peso strengthened 0.5 percent this month to 46.64 per dollar in Manila on Thursday, while all of its 11 Asian counterparts weakened, Bloomberg said.
It dropped 1.7 percent in April, before jumping 1.1 percent in the two days after the election – the biggest back-to-back advance since May 2014.
The Philippine Composite Stock Index has risen 3.1 percent in May in dollar terms and has the highest valuation among Asian equities based on current-year estimated earnings, the report added.
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