MANILA - The Philippine peso on Wednesday surged to a three-and-a-half-year high against the dollar amid signs that President Gloria Arroyo was about to lift a state of emergency after foiling an alleged coup plot, dealers said.

The unit traded at $51.40 to the dollar in early trading, compared to $51.65 on Tuesday. It was the peso's strongest level since August 5, 2002, when it hit 51.20.

Dealers said the unit was supported by cash transfers from millions of Filipinos working abroad, while corporate demand for the US currency remained weak.

Finance Secretary Margarito Teves said Tuesday that Arroyo could lift the state of emergency as early as Saturday if there is no longer a threat to national security.*AFP

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