Philippine Peso Halts Two-Day Advance on Global Growth Concern

The Philippine peso dropped, snapping a two-day advance, as signs the global economic slowdown is worsening deterred investors from buying emerging-market assets. Government bonds were steady.

The peso pared its gain to 4.9 percent this year after China’s manufacturing contracted for a second month and big Japanese manufacturers became more pessimistic, reports showed today. The Philippine Stock Exchange Composite Index (PCOMP) fell 0.7 percent.

“Global growth concerns will have a dampening effect on the appetite for Philippine assets,” said Joey Cuyegkeng, an economist at ING Groep NV in Manila. “The peso has been one of the strongest currencies in the region this year.”

The peso weakened 0.1 percent to 41.770 per dollar in Manila, according to Tullett Prebon Plc. The currency touched 41.358 on Sept. 17, the strongest level since April 2008. One- month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 5.5 percent.

China’s Purchasing Managers’ Index was 49.8 in September after a 49.2 reading in August, official data showed. That compares with the median forecast of 50.1 in a Bloomberg News survey.

The Tankan index for large manufacturers fell in the July to September quarter to minus 3 from minus 1, the fourth negative reading, the Bank of Japan (8301) said in Tokyo. The median estimate of 18 economists surveyed by Bloomberg News was for minus 4. A negative figure means pessimists outnumber optimists.

The yield on the government’s 4.75 percent bonds due Sept. 2022 was unchanged at 4.7 percent, according to prices from Tradition Financial Services.

To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net

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

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.