Bloomberg News

Philippine Peso Climbs on Remittances Speculation; Bonds Decline

January 02, 2012

Jan. 2 (Bloomberg) -- The Philippine peso rose on speculation remittances from Filipinos living overseas increased over the Christmas period. Local-currency bonds fell.

Cash transfers from Filipinos living outside the country are typically high in December and January, said Ricky Cebrero, head of treasury at Philippine National Bank in Manila. The country is assessing “market appetite and pricing” for the sale of as much as $1.5 billion of dollar-denominated securities approved by the central bank, Finance Undersecretary Rosalia de Leon said on Dec. 29.

“We’re at the tail-end of the holiday remittance season,” Cebrero said. “It makes sense for the government to be a first mover in overseas borrowing in the region.”

The peso strengthened 0.2 percent to 43.76 per dollar from Dec. 29 as of 10:58 a.m. in Manila, according to Tullett Prebon Plc. Financial markets were closed on Dec. 30. The currency will probably trade between 43 and 44 this quarter amid slowing global growth and a possible central bank interest-rate cut, Cebrero said.

The Philippines may offer bonds with maturities shorter than the 15-year global debt offered in 2011 if the euro-area debt crisis persists, de Leon said in an interview on Dec. 29.

The Bureau of the Treasury will auction 9 billion pesos ($206 million) of 5 percent bonds due August 2018 tomorrow. The government will sell 117 billion pesos of debt this quarter, rising from a planned 99 billion pesos in the preceding three months and 114 billion pesos in the first quarter of 2011, the treasury said last week.

The yield on the 7.375 percent peso bond due March 2021 advanced 18 basis points, or 0.18 percentage point, from Dec. 28 to 5.30 percent, according to Tradition Financial Services. Local debt markets were closed on Dec. 30 and no prices are available from Tradition for Dec. 29.

--Editors: Andrew Janes, Ven Ram

To contact the reporter for this story: Clarissa Batino in Manila at cbatino@bloomberg.net.

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


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