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Peso strengthens as growth target raised for 2021.
The Philippine peso has been on a steady rise in recent weeks, thanks to the government’s announcement of a higher growth target for 2021. The country’s economic managers have raised their growth forecast for this year to 6-7%, up from the previous estimate of 4.5-6.5%.
This positive outlook has boosted investor confidence in the Philippine economy, leading to a surge in demand for the peso. As of writing, the peso is trading at around 48.5 to the US dollar, its strongest level in over a year.
The government’s decision to raise its growth target is based on several factors, including the country’s successful vaccination rollout, the easing of quarantine restrictions, and the gradual reopening of the economy. These developments have led to a rebound in consumer and business confidence, as well as an increase in domestic consumption and investment.
The higher growth target is also expected to be supported by the government’s infrastructure spending program, which aims to boost economic activity and create jobs. The government has allocated over PHP 1 trillion ($20 billion) for infrastructure projects this year, including the construction of new airports, seaports, highways, and railways.
The peso’s strength is good news for the Philippine economy, as it makes imports cheaper and helps to control inflation. It also makes the country’s exports more expensive, which could pose a challenge for exporters. However, the government is confident that the benefits of a stronger economy will outweigh any short-term challenges.
Overall, the Philippine peso’s recent gains reflect the country’s improving economic prospects and the government’s commitment to supporting growth. As the economy continues to recover from the pandemic, investors are likely to remain bullish on the peso, providing a boost to the country’s overall economic performance.