The Philippine peso gained, snapping a three-day decline, after second-quarter economic growth beat economists’ forecasts, brightening the outlook for investment inflows.
The peso erased losses after the statistics bureau reported gross domestic product increased 5.9 percent in the three months through June from a year earlier, compared with a revised 6.3 percent in the preceding three months. The median estimate in a Bloomberg News survey was for 5.5 percent. Expansion will probably reach the high-end of a 5 percent to 6 percent growth forecast this year, Economic Planning Secretary Arsenio Balisacan said.
“Growth is slowing but remains at a healthy rate above 5 percent,” Marc Bautista, head of research at Metropolitan Bank & Trust Co. in Manila, said before the GDP report. “The peso weakness is a bit seasonal at the moment as remittances slacken around this time of the year.”
The peso gained 0.3 percent to 42.23 per dollar at the close in Manila, data from Tullett Prebon Plc showed. It earlier fell to 42.410 from 42.355 yesterday. The currency dropped 1.2 percent in August and is up 3.8 percent for the year. One-month implied volatility, which measures exchange-rate swings used to price options, fell 19 basis points to 6.11 percent.
The nation’s exports grew 4.2 percent in June from a year earlier, compared with a 19.7 percent gain in May, the statistics bureau reported on Aug. 10. Remittances increased by 4.2 percent, versus 5.1 percent in May and marked the smallest gain since March 2011.
President Benigno Aquino’s push to lure foreign investment and bolster growth is gaining momentum, with pledges from companies including Glencore International Plc and Gazasia Ltd. this year. The central bank cut its benchmark interest rate to a record-low 3.75 percent in July to support growth.
“Bangko Sentral ng Pilipinas will review the stance of policy, and calibrate any further action” after considering the impact of increased public spending for reconstruction after recent floods and the global demand slowdown, Governor Amando Tetangco said in a mobile-phone message.
“We have sufficient room in our policy toolkit to address these factors to protect our inflation target,” he said.
The yield on the 4.875 percent bonds due August 2022 dropped one basis point, or 0.01 percentage point, to 4.875 percent, according to Tradition Financial Services. The yield has declined from 4.93 percent on Aug. 22, the highest since the securities were sold this month.