Philippine Peso Advances a Second Week on Exports, Yellen

The Philippine peso rose for a second week, the longest run of gains since October, after export growth exceeded estimates and Federal Reserve Chair Janet Yellen said U.S. stimulus cuts will be “measured.”

Overseas shipments rose 15.8 percent in December from a year earlier, official data showed, more than the 10.4 percent median estimate in a Bloomberg News survey. Yellen told lawmakers this week that only a “notable change” in U.S. economic outlook would prompt the central bank to change the pace of its tapering.

The peso appreciated 0.6 percent from Feb. 7 and 0.3 percent today to 44.723 per dollar in Manila, prices from Tullett Prebon Plc show. It touched 44.72 today and yesterday, the strongest level since Jan. 14, and has pared its decline this year to 0.8 percent.

“Exports are a little bit stronger,” said Andy Ji, a Singapore-based currency strategist at Commonwealth Bank of Australia. “A current-account surplus is a key driver to peso outperformance. There’s a slight pick-up in global risk appetite due to Yellen’s message.”

The Southeast Asian nation expects a current-account surplus of $10.4 billion this year compared with an estimated $11.1 billion in 2013, central bank Governor Amando Tetangco said Dec. 20.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, dropped 74 basis points in the past five days to 5.8 percent, data compiled by Bloomberg show. The gauge rose five basis points today.

The yield on the government’s 8 percent bonds due July 2031 increased one basis point this week to 5.07 percent, according to prices from Tradition Financial Services. It slipped one basis point today.

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

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