Bloomberg News

Philippine Peso Declines to Seven-Week Low as Remittances Slow

March 15, 2012

The Philippine peso dropped to a seven-week low as the central bank reported the smallest gain in remittances in 10 months. Ten-year bonds fell, pushing yields to the highest level in more than two months.

Money sent home by Philippine citizens living abroad, the nation’s second largest source of foreign-exchange, rose 5.4 percent in January from a year earlier, after a 6.2 percent gain the previous month, according to today’s report. The peso fell for a fifth day, the longest losing streak since September, after data this week showed U.S. retail sales rose the most in five months, boosting demand for the dollar.

“The weakness in January remittances may be seasonal,” said Radhika Rao, an economist at Forecast Pte in Singapore. “That, coupled with good data coming out of the U.S., is giving support to the dollar.”

The peso lost 0.3 percent to 43.000 per dollar as of 4:24 p.m. in Manila, according to Tullett Prebon Plc. It touched 43.160 earlier, its weakest level since Jan. 24.

The yield on the 7.375 percent bonds due March 2021 climbed eight basis points, or 0.08 percentage point, to 5.28 percent, according to ICAP Plc.

“If we see a sustained weakness in remittances, that might put some pressure on growth and the peso,” said Jonathan Ravelas, a market strategist at BDO Unibank Inc. in Manila.

To contact the reporter on this story: Karl Lester M. Yap in Manila at kyap5@bloomberg.net

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


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