NEWSFLASH

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PESO GAINS 91.5 CENTAVOS TO THE DOLLAR

Manila, May 7, 1998 - The peso made a very strong rebound against the US dollar Tuesday, gaining 91.5 centavos as the currency was boosted by strong inflows of foreign investments.

The local currency broke past the P39=$1 barrier and closed at P39.20=$1, for a weighted average rate of P39.074 to the dollar.

Citicorp Securities president Omar Cruz said the foreign inflows in the past two days were being used by investors targeting blue chip stocks in the equities market.

The Philippine Exporters Confederation believed the real value of the peso would be at the range of between P36 and P39 against the dollar.

"This is the real value in practical terms -- the rate is competitive and will not cause inflationary pressures," said Philexport president Sergio Ortis-Luis Jr.

Bangko Sentral ng Pilipinas Governor Gabriel Singson said the technical correction in the foreign exchange rate was due to the realization that there was an exaggeration on the outcome of the May 11 national elections.

"I think there is a consensus now that nothing bad will happen during the elections," said a dealer. "Their analysis is that President Ramos would not simply throw away all the economic gains reaped during the past years by cheating in the elections."

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