The Philippines was the recipient of record inflows of portfolio investment in 2010 owing to the relatively high yields available in the country, contributing to a 5.7% appreciation in the value of the peso against the US dollar in that year on an annual average basis. Capital inflows are likely to remain strong this year, but they may weaken next year as central banks in the developed world tighten monetary policy, making Philippine yields less attractive. Nonetheless, the country's relatively rapid economic growth, together with continued current-account surpluses, should help to support the peso in the forecast period. The currency is forecast to appreciate against the US dollar, strengthening to an average of P43.6:US$1 in 2015, from P45.1:US$1 in 2010. But the peso would be vulnerable if global risk aversion were to increase in response to, for example, renewed concerns about sovereign debt defaults in Europe. The peso would also be hit if inflation were to accelerate more rapidly than forecast.