Philippine Peso Falls as Spain Concern Mounts

The Philippine peso advanced to the strongest level in a month after April exports climbed more than economists estimated.

Overseas shipments increased 7.6 percent from a year earlier, a statistics office report showed today, exceeding the median 0.5 percent gain forecast in a Bloomberg News survey. The currency strengthened for a third day before the central bank unveils remittances data for April tomorrow. Funds sent home by overseas Filipinos rose 5.4 percent in the first quarter, outpacing the 5 percent growth predicted by the monetary authority for 2012.

“The exports data was positive and some banks are experiencing more inflows,” said Lito Mercado, head of trading at Rizal Commercial Banking Corp. in Manila. “The peso will remain strong but will still be affected by events globally.”

The peso appreciated 0.2 percent to 42.558 per dollar in Manila, according to Tullett Prebon Plc. The currency touched 42.430, the highest level since May 11. Its one-month implied volatility, a measure of exchange-rate swings used to price options, increased 59 basis points, or 0.59 percentage point, to 7.09 percent, the highest level in more than a week.

“The uptick in exports is a welcome development, especially given the uncertainties in other jurisdictions,” central bank Governor Amando Tetangco said in a mobile-phone message to reporters. “We will continue with our policy of a market-determined exchange rate, but we will maintain a presence in the market to ensure there are no excessive movements.”

Bangko Sentral ng Pilipinas kept its benchmark interest rate at a record-low 4 percent during a review today, a decision forecast by 14 of 15 economists in a Bloomberg News survey. One predicted a 25-basis-point cut.

The yield on the government’s 8 percent bonds due July 2031 increased six basis points, or 0.06 percentage point, to 6.0 percent, according to prices from Tradition Financial Services.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE