Thursday, April 27, 2006

ANALYST FEARS PESO COULD DROP TO 56:$1


MANILA
,
APRIL 26, 2006
(STAR) Fund manager and stock market analyst Ignacio Gimenez expressed concern yesterday that the peso may drop back to 56.50 to the dollar if the value-added tax on oil and fuel is suspended or talk of amending the expanded VAT law is prolonged.

"If the government pushes through with the deferment of the EVAT, wholly or partly, Philequity is changing its forecast from P50 to $1 to P56.50 to $1," said Gimenez, president of Philequity Management Inc. who also writes a weekly column for The STAR.

He said any change or suspension of VAT collection "sends a very bad signal to investors as this will show that the government is indecisive and populist."

Gimenez warned that as the proposal alone has already weakened the peso, "interest rates will likely go up and the stock market will likely decline" if these talks continue.

From being the strongest currency in Asia in March last year, he said the peso is now the weakest, closing at 51.90 to the dollar yesterday.

"Whereas Asian currencies and major currencies are rallying strongly against the (US) dollar, the Philippine peso is doing the reverse," Gimenez said.

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The peso exchange fluctuation does not only result because of the continuing Oil hike in the world market, but is a direct result of analysts opininions on the state of the country. Current political state and the ever resounding noise of coup de'ta is changing the image of the country from average to worst investment area. People are bickering so much on minimal employment opportunities in the country, low government spending on basic services, the detrioration of the education system, and the constant struggle to get money for food.

Ask yourself how can the government tackle this issues if the so called "masa" keeps on rallying and disturbing the peace of others? How can the President tackle this issue if the Senate ( supposed to be part of the government!!) acts on its own (personal) issues.. and continues to make probes ( will it end??) on things that are minimal priority..How can the government work and tackle the issues if the persons in governance are corrupt and cannot be trusted...? So how can the country move on???

ask yourself that...

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