Philippine Bonds Advance as Inflation Beats Estimate; Peso Drops

Philippine bonds due 2031 gained for a third day this week after official data showed inflation in December was slower than economists estimated. The peso had its biggest drop in more than three months, paring a weekly advance.

Consumer prices rose 2.9 percent from a year earlier, the National Statistics Office reported in Manila today, after a 2.8 percent increase in November. Analysts surveyed by Bloomberg expected a 3.1 percent gain. Central bank Governor Amando Tetangco said today inflation risks remain fairly balanced, suggesting current monetary policy is appropriate. Bangko Sentral ng Pilipinas cut its benchmark interest rate by 100 basis points in 2012.