Bloomberg News

Philippine Peso Reverses Loss on Cheaper Oil; Bonds Advance

April 11, 2012

The Philippine peso reversed earlier losses on speculation crude oil prices near a two-month low will limit the nation’s import bill. Ten-year bonds gained.

The Philippines buys almost all of the oil it uses from abroad and the cost of crude on New York has dropped 8.6 percent since reaching this year’s high of $110.55 a barrel on March 1. The peso earlier fell to its lowest level in almost two weeks as concern Europe’s debt crisis will worsen curbed demand for riskier assets.

“The exceptionally stronger peso can also be attributed to the lower oil price,’ said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila. “There’s less demand for foreign currency.”

The peso appreciated 0.2 percent to close at 42.755 per dollar in Manila, according to Tullett Prebon Plc. The currency touched 42.895 today, the weakest level since March 30. One- month implied volatility, which measures exchange-rate swings used to price options, was unchanged at 5.70 percent.

The currency may trade between 42.70 and 43 for the rest of the week, Ravelas predicted.

Oil traded at $101.08 in electronic trading on the New York Mercantile Exchange. It reached $100.68 yesterday, the lowest level since Feb. 15.

Government data tomorrow is expected to show exports increased 1.7 percent from a year earlier in February following a 3.1 percent gain in January, according to the median estimate of economists surveyed by Bloomberg.

The yield on the Philippines’ 15 percent bonds due March 2022 slipped one basis point, or 0.01 percentage point, to 5.8 percent, 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: James Regan at jregan19@bloomberg.net.


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