Philippine Peso, Bonds Rise as Traders Bet on Global Stimulus

The Philippine peso rose to a three- week high and bonds gained on speculation global policy makers will announce measures to spur economic growth amid Europe’s persistent debt crisis.

The European Central Bank is “ready to act” on downside risks to the outlook, President Mario Draghi said in Frankfurt yesterday. The U.S. economy may warrant additional monetary stimulus as it remains vulnerable to setbacks, Federal Reserve Vice Chairman Janet Yellen said in Boston. The Philippines needs no extraordinary measures to stabilize the peso, which remains broadly stable, Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said May 29.

“The market is speculating the ECB will take the necessary steps to resolve their crisis and that’s boosting global sentiment,” said Rey Infante, a currency trader at Philippine National Bank (PNB) in Manila.

The peso rose 0.1 percent to 43.16 per dollar as of 4:00 p.m. in Manila and reached 43.045, the highest level since May 17, prices from Tullett Prebon Plc show. One-month implied volatility, a measure of exchange-rate swings used to price options, fell 25 basis points, or 0.25 percentage point, to 6.75 percent.

The yield on 6.375 percent government bonds due January 2022 fell six basis points to 5.39 percent, according to Tradition Financial Services.

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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