Philippine Peso Heads for Fifth Weekly Gain on Economic Outlook

The Philippine peso completed a
fifth weekly gain on optimism the nation’s improving economic
outlook will draw overseas capital.

The currency’s strength reflects the economy’s bright
growth prospects, the BusinessMirror reported yesterday citing
central bank Deputy Governor Diwa Guinigundo. The expansion in
gross domestic product this year may be closer to the top-end of
the government’s 6 percent to 7 percent forecast and could even
surpass the projection due to stronger consumption and
investments, Guinigundo told state-owned television on Jan. 7.
Global funds bought $429 million more local shares than they
sold this month through yesterday, exchange data show.

“The Philippines’ economic fundamentals remain robust and
growth has been strong,” said Prakriti Sofat, a regional
economist at Barclays Plc in Singapore. “The central bank is
comfortable with the peso’s strength, which is driven by
fundamental flows.”

The peso advanced 0.1 percent this week and today to 40.575
per dollar in Manila, according to Tullett Prebon Plc. It
touched 40.550 on Jan. 14, the strongest level since March 2008,
and climbed 6.8 percent last year in the second-best performance
among Asia’s 11 most-traded currencies.

One-month implied volatility, a measure of expected moves
in the exchange rate used to price options, held at 4 percent.

Overseas workers’ remittances rose 7.6 percent to $1.92
billion in November, a Jan. 15 central bank statement showed,
beating the 5 percent increase forecast by economists in a
Bloomberg survey.

The yield on the government’s 9.25 percent bonds due
January 2016 dropped seven basis points, or 0.07 percentage
point, to 3.82 percent this week, according to noon fixing
prices from the Philippine Dealing Exchange Corp. The rate
fell one basis point today.

To contact the reporter on this story:
Liau Y-Sing in Kuala Lumpur at
yliau@bloomberg.net

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

Article source: http://www.bloomberg.com/news/2013-01-18/philippine-peso-heads-for-fifth-weekly-gain-on-economic-outlook.html

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