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.
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