The peso will likely drop to as much as P48.50 against the US dollar in the second half of the year as the country's balance of payments (BOP) remains weak due to the steady outflow of portfolio investments, ING said Wednesday.

"We see the USD/PHP trading in a 47.50 to 48.50 range over the next two quarters with weak BOP and public finances limiting the downside and global healing capping the upside," the Dutch banking group said.

The country's BOP posted a $2.198 billion surplus in the first four months of 2009, with the $466 million surplus in April reversing the $472 million deficit in March.

But ING said that the surplus was only due to the continued inflow of remittances from overseas Filipinos since other components of the BOP were negative.

Quoting a central bank report, ING cited the $276.11 million worth of net portfolio outflow in April against the $32 million inflow in March.

Earlier, Bangko Sentral ng Pilipinas (BSP) governor Amando Tetangco attributed the April surplus to the central bank's foreign exchange operations. The BSP usually intervenes in the foreign exchange market to reduce the volatility in the exchange rate by buying or selling pesos and dollars.

"There were also foreign exchange deposits by banks and the national government as well as income from BSP's investments abroad," Tetangco said, adding that "these inflows were partly offset by foreign debt servicing by the national government."

The April surplus could also be attributed to the country's robust gross international reserve (GIR) level of $39.5 billion, the BSP chief noted.

Tetangco said the GIR could cover 6.3 months of imports of goods and payments of services and income. It was also equivalent to 5.6 times the country's short-term external debt based on original maturity and 3.0 times based on residual maturity.

The BSP had projected that the GIR would reach at least $37.5 billion this year, with remittances posting zero growth due to job losses abroad.

The GIR is the sum of all foreign exchange flowing into the country and the BOP is the remaining balance net of all external payments for debt servicing and imports.