Bloomberg News

Philippine Peso Gains a Second Week on Support From Remittances

March 09, 2012

The Philippine peso gained for a second week on speculation money sent home by Filipinos working abroad will support demand for the currency.

Remittances, which contribute 10 percent to the $200 billion economy, increased 6.2 percent in December. The central bank is due to issue January figures on March 15. Private investors have agreed to swap about 95.7 percent of Greek debt, more than the threshold needed to win a second aid package and avoid a default. Stocks indexes across Asia rose.

“Remittances are driving up the peso,” said Goh Puay Yeong, a Singapore-based foreign-exchange strategist at Credit Suisse group AG. It’s “risk-on” in the market, he said.

The peso climbed 0.3 percent this week to 42.585 per dollar at the close in Manila, according to Tullett Prebon Plc. The currency was little changed today. One-month implied volatility, a measure of exchange-rate used to price options, was steady this week at 6.5 percent, according to data compiled by Bloomberg.

Consumer prices increased 2.7 percent in February from a year earlier, the slowest pace since September 2009, official data showed on March 6. The Philippines is also due to issue export data for January on March 13. Shipments probably contracted for a ninth month, falling 18.5 percent from a year earlier, according to the median estimate of economists in a Bloomberg News survey.

The yield on the 6.375 percent government bonds due January 2022 fell five basis points, or 0.05 percentage point, to 5.22 percent and was down one basis point today, according to noon fixing prices from the Philippine Dealing & Exchange Corp.

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

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


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