Feb. 15 (Bloomberg) -- The Philippine peso strengthened as remittances exceeded the central bank’s growth forecast for 2011. Government bonds gained.
Money sent home by Filipinos living abroad rose 7.2 percent in 2011, the monetary authority reported today, surpassing its 7 percent growth projection. The transfers account for about 10 percent of the Philippine economy.
“Remittances remain supportive of the currency,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila. “It’s still strong at 7.2 percent growth, better than the government’s target.” He forecast growth this year will also be about 7 percent.
The peso advanced 0.2 percent to close at 42.643 per dollar in Manila, contributing to a 2.8 percent advance for this year, according to Tullett Prebon Plc.
An increase of between 5 percent and 7 percent in the Philippines’ gross domestic product is possible in the first quarter, Economic Planning Secretary Cayetano Paderanga said last week. That compares with a gain of 3.7 percent in the final three months of 2011 and 4.6 percent growth in the year-earlier period.
The yield on the government’s 6.375 percent bonds due January 2022 fell three basis points, or 0.03 percentage point, to 5.11 percent, according to a noon fixing from the Philippine Dealing & Exchange Corp.
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