Bloomberg News

Philippine Peso Climbs to Three-Week High; Bonds Gain on Buyback

October 10, 2011

Oct. 10 (Bloomberg) -- The Philippine peso rose to a three- week high after data showed U.S. companies hired more workers than economists estimated in September, fueling optimism demand for regional exports will grow.

American employers added 103,000 workers last month, beating the 60,000 median forecast in a Bloomberg survey of analysts, a Labor Department report showed on Oct. 7. The peso gained for a fourth day before the government issues export numbers for August tomorrow, with shipments likely to have increased 1 percent, according to Enrico Tanuwidjaja, a strategist at Malayan Banking Bhd. in Singapore.

“Sentiment is much better with the jobs data, which present good buying opportunities in Asian currencies given the recent selloff,” he said. “We are looking for Japan’s recovery to beef up Philippine exports.”

The peso climbed 0.3 percent to 43.415 per dollar as of 3:30 p.m. in Manila, according to Tullett Prebon Plc. It reached 43.370 earlier, the strongest level since Sept. 19, after advancing 0.4 percent last week.

Philippine exports probably declined 5.7 percent in August from a year earlier, after shrinking 1.7 percent in July, according to the median forecast in a Bloomberg News survey of nine economists.

Bond Buyback

Bonds advanced as the government said it plans to buy back as much as $3 billion in existing foreign-currency debt. Ten- year notes also gained as the nation received more bids than the amount offered at a sale of securities to individuals, signaling increasing demand.

The Philippines sold today a total 20 billion pesos ($461 million) of 10- and 15-year bonds to individual investors to tap excess cash in the banking system and fund spending. The Bureau of the Treasury sold 10 billion pesos of 10-year notes at 5.75 percent and the same amount of 15-year debt at 6.25 percent. Demand amounted to was 22.98 billion pesos and 47.98 billion pesos, respectively, it said.

“Demand was strong and that’s good for the market,” said Fernando Mangalindan, a bond trader at Philippine Savings Bank in Manila. “The buyback means there’s going to be less supply in the market.”

The yield on the 6.5 percent security maturing in April 2021 dropped 12.5 basis points, or 0.125 percentage point, to 5.80 percent, according to Tradition Financial Services. The price increased 0.93, or 93 pesos per 10,000 peso face amount, to 105.0729.

The nation’s 4.95 percent dollar bond due January 2021 climbed for a third day. Its yield fell 14 basis points to 5.51 percent, the lowest level since Sept. 23, according to prices from Royal Bank of Scotland Group Plc.

The Philippine government also plans to buy back existing “expensive” foreign-currency securities, Treasurer Roberto Tan said. About $17.5 billion of worth of bonds denominated in the dollar and euro are eligible for tender, Finance Secretary Cesar Purisima told reporters.

--With assistance from Max Estayo in Manila. Editors: Simon Harvey, Anil Varma

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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