Bloomberg News

Philippine Peso Advances as U.S. Economic Data Buoys Sentiment

October 06, 2011

Oct. 6 (Bloomberg) -- The Philippine peso strengthened for a second day after U.S. economic data released yesterday allayed concern that the recovery in the world’s biggest economy is faltering.

Companies in the U.S. added 91,000 jobs last month, according to ADP Employer Services. The median forecast in a Bloomberg News survey was for an advance of 75,000. The peso traded at a one-week high after President Benigno Aquino said yesterday that the currency’s trading range has been within a “tolerable” level. The peso has fallen 0.2 percent this year, compared with drops exceeding 4 percent for Taiwan’s dollar, South Korea’s won and India’s rupee.

“The peso is externally driven by the slight improvement in data, especially in the U.S.,” said Emilio Neri, an economist at the Bank of Philippine Islands in Manila. “The peso has been a relative outperformer and we suspect there’s some degree of intervention in the market.”

The peso gained 0.4 percent to 43.68 per dollar as of the 4 p.m. close of trading in Manila, according to Tullett Prebon Plc. The currency fell 0.9 percent last quarter, the least among Southeast Asian currencies.

The peso’s recent weakness “doesn’t reflect our financial condition” as the nation’s economic fundamentals are “still solid,” Aquino told reporters yesterday. The government had a budget surplus of 9.22 billion pesos ($211 million) in August, reversing a 26.5 billion peso deficit in July, official data released last month showed.

The yield on the 6.5 percent April 2021 bonds fell 17 basis points, or 0.17 percentage point, to 5.94 percent, according to Tradition Financial Services. That was the lowest rate since Sept. 15.

The Bureau of the Treasury will auction 10- and 15-year bonds on Oct. 10 to set the yields of securities that will be offered to individual investors, according to its website. A regular bond auction scheduled for Oct. 11 was scrapped, it said.

--With assistance from Clarissa Batino in Manila. Editors: Ven Ram, Simon Harvey

To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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