The Philippine peso fell, after rallying last month by the most since June, following the government’s move to curb gains in the currency by limiting foreign investment. Sovereign bonds declined.
The peso touched the lowest level in almost a week after the government added real-estate, lending and health care to industries that are subject to offshore-ownership limits, Executive Secretary Paquito Ochoa said in a Nov. 2 e-mail. The central bank has cut its overnight rate four times this year to temper the appreciation of the peso, which has advanced 6.3 percent in 2012 and touched a four-year high on Oct. 18.
The stronger peso is having “some effect on remittances and there’s a clamor from exporters,” said Jose Vistan, head of research at AB Capital Securities Ltd. in Manila. “The peso has been strong on its fundamentals, and those measures may not stop more money from coming into the country.”
The peso declined 0.2 percent to 41.238 per dollar from Oct. 31 in Manila, according to data from Tullett Prebon Plc. It touched 41.265 earlier, the weakest level since Oct. 30. Financial markets were closed on Nov. 1 and Nov. 2 for holidays. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 5 percent, according to data compiled by Bloomberg.
Foreign investors have pumped almost $2 billion into Philippine stocks this year, exchange data show, helping drive a 25 percent surge in the benchmark index. A government report tomorrow may show inflation slowed to an annual rate of 3.5 percent in October from 3.6 percent in September, according to the median estimate in a Bloomberg survey of economists.
The yield on the 5.375 percent notes due March 2027 climbed more than two basis points, or 0.02 percentage point, to 5.35 percent, according to Tradition Financial Services. The treasury will offer 9 billion pesos ($218 million) of five-year securities tomorrow, according to its sales calendar.