The Philippine peso reached a 12-week high on speculation funds sent home by Filipinos working abroad are increasing. Bonds rose.
Remittances account for about 10 percent of the $200 billion economy, and inflows usually accelerate before the opening of the regular school term in June. They quickened to a 6.9 percent pace in May 2011 from a year earlier after an increase of 6.3 percent the previous month, central bank data show.
“Remittances have been coming in strong,” said Lito Mercado, head of trading at Rizal Commercial Banking Corp. in Manila. “Many players are positioned for that. In the next four weeks, we’ll see more and more remittances for tuition payments.”
The peso advanced 0.1 percent to 42.190 per dollar at the close in Manila, according to Tullett Prebon Plc. The currency touched 42.110, the strongest level since Feb. 9. One-month implied volatility, which measures exchange-rate swings used to price options, was unchanged at 4.50 percent.
The yield on the Philippines’ 6.5 percent bonds due April 2021 fell three basis points, or 0.03 percentage point, to 5.25 percent, according to prices from Tradition Financial Services.
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