Bloomberg News

Philippine Peso Advances as $500 Million of Investment Pledged

June 06, 2012

The Philippine peso climbed the most in a week as foreign companies pledged to invest more than $500 million in the Southeast Asian nation, boosting the growth outlook. Bonds advanced.

Glencore International Plc plans to invest $500 million to $600 million to expand its Philippine unit’s smelting capacity and build a power plant, President Benigno Aquino’s office said in a statement today. Gazasia Ltd., a London-based alternative fuel company, also agreed to build a plant that will convert organic waste material into energy, the statement said. The economy expanded 6.4 percent in the first quarter from a year earlier, the fastest pace since 2010, official data show.

“There is renewed confidence in the Philippines with Aquino’s platform of transparency and a level-playing field gaining ground,” said Antonio Espedido, treasurer at China Banking Corp. in Manila.

The peso advanced 0.6 percent to 43.190 per dollar at the 4 p.m. close in Manila, prices from Tullett Prebon Plc show. The currency touched 43.185, the strongest level since May 22. One- month implied volatility, a measure of exchange-rate swings used to price options, fell 0.5 percentage point to 7 percent.

The yield on the 6.375 percent government bonds due January 2022 fell eight basis points, or 0.08 percentage point, to 5.45 percent, according to Tradition Financial Services.

Aquino, accompanied by his trade, finance, energy, defense, tourism, transport and foreign affairs secretaries, has been visiting the U.K. and will head to the U.S. next, where he is scheduled to meet President Barack Obama on June 8.

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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