(Bloomberg) -- A surprise increase in money sent home by overseas workers has given Asia's best-performing currency this year another boost.
The Philippine peso advanced for a fourth day Tuesday to the strongest since November 2016 after the central bank said the previous day that remittances increased 7.7% in June, defying forecasts for a decline. The peso has now appreciated 4.7% in the past three months, compared with 2.3% for its Asian peers.
The turnaround in remittances adds another positive for a currency that's already been benefiting from a weaker U.S. dollar and a gradual winding back of lockdown restrictions to support the economy.
“The peso is rising largely due to remittances as the currency continues to outperform even when the dollar gets stronger,” said Paul Raymond Favila, head of markets and securities services at Citigroup Inc. in Manila. “Sustainability is there until there is economic recovery, which will lead to larger imports, especially of oil. I don't see that happening anytime soon.”
Remittances are the nation's largest source of foreign exchange after exports, and account for about 10% of the economy. The reading of $2.5 billion for June was the largest gain in eight months. Economists had forecast a decline of 7.2%.
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