Bloomberg News

Philippine Peso Falls Before Report That May Show Growth Slowed

August 29, 2012

The Philippine peso fell for a second day and bonds advanced before a government report that economists predict will show economic growth slowed last quarter.

Gross domestic product rose 5.5 percent in the three months through June, according to the median estimate of 17 economists in a Bloomberg News survey before tomorrow’s report due at 10 a.m. The $225 billion economy expanded 6.4 percent in the first quarter, the fastest pace in Southeast Asia.

“There’s caution ahead of the GDP numbers and I think we could see that exports lost some steam last quarter,” said Radhika Rao, an economist at Forecast Pte in Singapore. She projected 5.5 percent second-quarter growth.

The peso fell 0.1 percent to 42.355 per dollar at the close in Manila, Tullett Prebon Plc prices showed. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 6.3 percent.

Bonds rose after the Bureau of the Treasury sold all the 9 billion pesos ($213 million) of 4.75 percent notes maturing in 2019 on offer yesterday. Bids totaled 24.7 billion pesos. The yield on the 5 percent securities due April 2019 fell five basis points, or 0.05 percentage point, to a three-week low of 4.7 percent, according to Tradition Financial Services.

The government has received proposals from banks offering to arrange a retail bond sale and a debt exchange and will gauge investor demand for these funding exercises, Treasurer Roberto Tan said yesterday.

To contact the reporters on this story: Clarissa Batino at cbatino@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.


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