Bloomberg News

Philippine Peso Trades Near 10-Month Low on Trade-Gap Outlook

December 15, 2011

Dec. 15 (Bloomberg) -- The Philippine peso traded near a 10-month low on speculation the nation’s trade deficit will worsen as exports slow amid Europe’s debt crisis. Bonds advanced.

Overseas workers’ remittances, which account for 10 percent of the Philippines’ $200 billion economy, increased at a slower pace in October, rising 6.2 percent from a year earlier, compared with an increase of 8.4 percent the previous month, the central bank said today. The trade gap widened to $1.2 billion in September from $803 million the previous month, government data showed on Nov. 25.

“The overall focus of traders here is what’s happening in the European Union and the possible impact it will have on Asian growth,” said Joey Cuyegkeng, an economist at ING Groep NV in Manila. The trade deficit is likely to widen in the coming months, he said.

The peso traded at 44.115 per dollar at the close in Manila, compared with 44.140 yesterday, according to Tullett Prebon Plc. The currency touched 44.323 earlier, the weakest level since Jan. 31. It has lost 1.1 percent this week.

Philippine exports fell in October for a sixth month, declining 14.6 percent from a year earlier, the statistics office said on Dec. 13.

The yield on the government’s 5.75 percent notes due November 2021 fell four basis points, or 0.04 percentage point, to 5.72 percent, according to the midday fixing prices from the Philippine Dealing & Exchange Corp.

The central bank approved the government’s plan to sell as much as $1.5 billion of global bonds, a government official said, declining to be identified as the information isn’t public yet. The government plans to sell 10- and 25-year dollar-denominated debt, the official said.

--Editors: Andrew Janes, Ven Ram

To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net.

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.


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