MANILA - The peso closed at a fresh high of 48.10 to the dollar yesterday its best finish in nearly six years, amid strong dollar remittances and the influx of foreign money into the local financial markets.

Yesterday's close was the highest since March 9, 2001, when it ended at 48.065.

The Bangko Sentral ng Pilipinas said the Philippines posted a balance of payments surplus of $731 million in January down from a surplus of 1.925 billion for the same period last year.

"This was due to the proceeds of the national government's bond issue, and the central bank's investment income and foreign exchange operations," BSP governor Amando Tetangco Jr. said.

Meanwhile, Philippine exports are seen rising by a slower 10-12 percent clip this year due mainly to the rise in the local currency against the dollar, a business group said. Weak electronics shipments saw Philippine exports fall 3.8 percent from a year earlier to 3.68 billion dollars in December, the first downturn in 13 months.

For the whole year, exports still grew 14 percent to 473 billion dollars, outpacing the government's growth target of 10 percent.

"Philippine exports continuously declined, especially in the last quarter of 2006," said Sergio Ortiz-Luis, treasurer of the Philippine Chamber of Commerce and Industry.

"The reason was the new exchange rate where local exporters were hurt," he told reporters.

The peso was at a six-year high of 48.140 to the dollar Friday and dealers said some forecasts see the local unit topping out at 47.50.

"Thus, this year, we pegged the country's export growth at 10-12 percent," Ortiz-Luis said, adding: "But 15 percent would be a fighting target."

He said small- and medium-scale enterprises were "badly hit" by the peso's strength.

"Remittances from overseas Filipino workers and semiconductor and electronics exports, which are expected to grow better this year, will drive the country's economy," said Alberto Fenix, president-emeritus of the chamber.*AFP

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