Philippine Peso Falls for a Third Day on Global Growth Concern

The Philippine peso fell for a third day, the longest losing streak in a month, on speculation demand for emerging-market assets will weaken as the global economy cools. Bonds gained.

The MSCI Asia-Pacific Index (MXAP) of stocks dropped the most in more than a week as reports showed Japan’s industrial output declined in November while South Korean manufacturers’ confidence fell to a 30-month low. Yields on 10-year Philippine bonds dropped to the lowest level in a week after the central bank said yesterday inflation remains manageable.

“Economic indicators out of Asia are starting to show weakness and investors are seeking refuge in the U.S. dollar,” said Jonathan Ravelas, chief market strategist in Manila at Banco de Oro Unibank Inc., the Philippines’ largest lender. “Bond yields may move down as we have stable macroeconomic conditions that can support a low-interest rate environment.”

The peso lost 0.3 percent to 43.975 per dollar as of 3:59 p.m. in Manila, according to Tullett Prebon Plc. This week’s three-day decline is the longest losing streak since Nov. 25.

The yield on the government’s 6.5 percent bonds due April 2021 fell three basis points, or 0.03 percentage point, to 5.125 percent, according to Tradition Financial Services. That is the lowest level since Dec. 21.

Annual inflation is forecast to be within 4 percent to 4.9 percent in December, central bank Governor Amando Tetangco said yesterday, using 2000 as base year. Consumer prices rose 4.7 percent in November.

“The outlook for inflation remains manageable as we continue to see within-target inflation over the policy horizon,” Tetangco said. The central bank “remains watchful of global developments to ensure that our policy settings remain appropriate,” he said.

To contact the reporter on this story: Karl Lester M. Yap in Manila at

To contact the editor responsible for this story: Sandy Hendry at

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