Bloomberg News

Philippine Peso Drops a Third Week as Remittance Growth Slows

November 18, 2011

Nov. 18 (Bloomberg) -- The Philippine peso fell for a third week as growth in overseas remittances, the country’s second- biggest source of foreign exchange, slowed. Bonds gained.

Funds sent home by Filipinos working overseas rose 8.4 percent in September from a year earlier, after an 11.1 percent increase in August, the central bank reported this week. Exports, which make up about 30 percent of the $200 billion economy, dropped for a fifth month in September, official data showed on Nov. 10. Stocks declined on concern Europe’s debt crisis is worsening.

“Remittances remain resilient although the pace of growth may not be as fast as before given the weak global economy,” said Roland Avante, president of Philippine Business Bank in Manila. “The peso, like other currencies, is vulnerable to external developments and the European situation continues to stoke risk aversion.”

The peso closed 0.2 percent lower this week at 43.382 per dollar, according to Tullett Prebon Plc. It was little changed from 43.385 yesterday. The yield on the 7.375 percent bonds due March 2021 fell eight basis points this week, or 0.08 percentage point, to 5.65 percent, prices from Tradition Financial Services show. The rate declined two basis points today.

The central bank approved additional measures to further ease foreign-exchange transactions, including allowing companies to temporarily buy foreign currency from banks to pay loans not registered with the monetary authority, Governor Amando Tetangco said in a text message today.

Currently, companies can’t buy foreign currency from banks to serve unregistered loans.

--Editors: Simon Harvey

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To contact the reporters responsible for this story: Clarissa Batino at cbatino@bloomberg.net

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


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