PH peso chosen as currency favorite in 2011 by American investment bank Merrill Lynch

Merrill Lynch picked the Philippine peso and the Singapore dollar as its currency favorites this year, reports Inquirer.net. According to the report, the Philippine peso is undervalued by about 10 to 15 percent, considering the country’s "a little too large" external surplus.

"The peso, we believe, is mainly being supported by remittance inflows, which remain very strong," said Merrill Lynch foreign exchange strategist Ashok Bhundia. "The growth dynamics is getting structural boost from a reform-minded government and if expectations prove right, we should see the fiscal position improve structurally."

Based on a statistical model used by the bank, Bhundia said the peso will be at an estimated P42:US $1 in March, 43.50 in June, P42 in September and P40 by the end of the year.

For more on this story, log on to Inquirer.net.

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