MANILA, Philippines — Investors are cheering as Philippine stocks climb to record highs and the economy surges ahead at the fastest pace in 17 years.

But the booming growth is also lifting the Philippine peso, which is eroding the income of Filipinos like Hazel Gonzales, who depends on money sent home from her husband working as a mechanic in Kuwait.

"The effect on us is really big," she lamented. While her husband has been remitting the same portion of his salary, the stronger peso means she is receiving 18 percent less than when he arrived in Kuwait in November.

"It is good for the Philippines, because it is a signal that the economy is doing well," she said. "But for us, it means that my husband's remittance, which used to be, for example, 15,000 pesos ($324) is now down to 12,000 pesos ($259)."

Gonzales and her two children have had to cut down on spending, including dining out.

But she said she looks at the silver lining: An improving economy could mean better local wages that would allow her husband to come home.

"I told him, if the peso continues to rise, he should just come home. Maybe salaries here would also improve," she said.

That's the irony of the current economic boom in the Philippines. Over time, it may lead to a stronger and steadier economic growth that will benefit all Filipinos. But because so many depend on money sent home by relatives working abroad, for the moment, the boom is causing them considerable pain.

Gonzales' husband is one of about 8 million Filipinos — or 10 percent of the population — working overseas. Last year, they sent home a record $12.8 billion. About 40 million people, or almost half of the country, depend on remittances to pay for housing, school, food and health expenses.

The central bank has expressed concern over the rapid appreciation of the peso, which has risen 6.8 percent against the U.S. dollar so far this year. It said wild swings in the foreign exchange can disrupt local markets. But Gov. Amando Tetangco said authorities will continue to allow market forces to determine the rate.

Investor confidence, meanwhile, has grown on optimism about the outlook for corporate profits and the economy, which expanded 6.9 percent in the first quarter, the strongest growth since the first quarter of 1990. Exports have grown 13 percent so far this year, and foreign direct investment, which grew 26 percent last year, is pouring in.

One reason for the investor enthusiasm is the sharp reduction in the government's budget deficit since President Gloria Macapagal Arroyo in 2005 implemented an expanded value-added tax and other revenue-boosting measures. That means the government has more money to spend on infrastructure projects.

The government expects the 2007 deficit to stay below $1.3 billion — half of last year's $2.5 billion target.

The government said growth was fueled by strength in all major sectors of the economy — farming, services and manufacturing. But some question whether the Philippines has truly escaped from the boom-and-bust economic cycles of the past.

Arroyo, a U.S.-trained economist, boasts that the economy has experienced 24 straight quarters of economic growth — the longest growth streak over the past half century. Unemployment rates have been steady at about 8 percent.

Still, wages remain low in the Philippines, and that sends millions overseas in search of better-paying jobs. Economists say the Philippines needs at least 7 percent annual GDP growth to make progress on cutting poverty.

Nearly half of the country lives on $2 a day — a rate that hasn't changed in at least the last 10 years.

Filipino workers and exporters may be hurting because of the stronger peso, but they will benefit from lower inflation and interest costs, officials said.

Measures to mitigate the strong currency include a government fund that would finance export promotion and development. The fund has yet to start functioning.