Bloomberg News

Philippine Peso Touches 3-Week High on Global Recovery Signs

April 03, 2012

The Philippine peso touched a three- week high as signs of improvement in the global economy brightened the outlook for exports and spurred demand for higher-yielding assets.

The currency closed little changed after reports showed U.S. manufacturing picked up in March and China’s services sector expanded at the fastest pace in six months. Philippine 10-year bonds yield 355 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg.

“Higher-yielding currencies are performing well in a risk- on environment,” said Andy Ji, a Singapore-based foreign- exchange strategist at Commonwealth Bank of Australia.

The peso closed at 42.692 per dollar in Manila, compared with 42.690 yesterday, according to Tullett Prebon Plc. The currency reached 42.550 today, the highest level since March 13. The peso’s one-month implied volatility, which measures exchange-rate swings used to price options, was unchanged at 5.90 percent.

The U.S. Institute for Supply Management’s factory index climbed to 53.4 last month from 52.4 in February, a report from the Tempe, Arizona-based group showed yesterday. Readings greater than 50 signal growth. China’s non-manufacturing purchasing managers’ index rose to 58 in March from 48.4 in February, official data showed today.

The yield on the Philippines’ 7.375 percent bonds due March 2021 was steady at 5.35 percent, according to prices from Tradition Financial Services.

Inflation probably quickened to 2.8 percent in March from 2.7 percent the previous month, based on the median estimate of economists in a Bloomberg survey before a government report tomorrow. February’s rate was the lowest since September 2009.

The government reported today its first budget surplus in six months in February. The surplus was 10.66 billion pesos ($250 million) compared with a previously reported 15.9 billion- peso deficit for January.

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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