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Philippine Peso, Stocks Rise as Growth Tops Target: Manila Mover

The Philippine peso and stocks rose as President Benigno Aquino said economic growth surpassed the government’s 2012 target, supporting the case for a credit-rating upgrade. Government bonds gained.

Gross domestic product “definitely” increased more than the 5 percent to 6 percent goal, Aquino told reporters in Manila today before an offical report due Jan. 31. The Southeast Asian economy grew 6.4 percent last year, the fastest pace since 2010, according to the median forecast in a Bloomberg News survey. The nation will probably win an investment-grade rating in the first half, central bank Governor Amando Tetangco said last week.

“The peso is driven by fundamentals, especially from remittances, market inflows and the potential for credit-rating upgrades,” said Reuben Mark Angeles, head of research at First Metro Securities Brokerage Corp. in Manila. “Intervention possibility is there, but we think any weakness is a buying opportunity.”

The peso rose 0.5 percent 40.728 per dollar at the close in Manila, according to data from Tullett Prebon Plc. The currency climbed to 40.55 on Jan. 14, the strongest level since March 2008. The currency has gained more than 5 percent in the past year, making it Asia’s best-performer. It could surpass 40 per dollar by year-end, Angeles said.

The Philippine Stock Exchange Index rose 0.7 percent to close at a record 6,234.73. The measure has rallied 7.3 percent this year, topping a 2.5 percent gain in the MSCI Asia-Pacific Index.

Alliance, Phoenix

An expansion of 6.5 percent in the three months ended December is possible, Economic Planning Secretary Arsenio Balisacan said today. That compares with a 6.3 percent median estimate in a Bloomberg News survey. Agriculture, tourism and infrastructure are key growth areas, and expansion must be sustainable and broad-based, Aquino said in a speech today.

Alliance Global Group Inc., which has investments in casino, property and distilleries, climbed 3.3 percent to a record 18.90 pesos. Phoenix Petroleum Philippines Inc. rose 4.6 percent to close at an all-time high of 10.98 pesos after the company reported 2012 sales increased 26 percent.

One-month implied volatility, a measure of expected exchange-rate swings used to price options, was unchanged at 4.5 percent, the highest level this year, according to data compiled by Bloomberg.

Rating Outlook

The Southeast Asian has the highest junk rating at Moody’s Investors Service, Fitch Ratings and Standard & Poor’s. S&P, which raised the outlook on the country’s debt to positive last month, said an upgrade is possible this year, citing improved governance and public finances.

Moody’s upgraded the country one level to Ba1 on October, saying the economy was poised to record faster growth, lower inflation, and exchange-rate appreciation. S&P raised it one step to BB+ in July.

“The sentiment remains bullish on the peso given expectations of sustained growth momentum and credit-rating upgrades,” said Alan Cayetano, head of foreign-exchange trading at Bank of the Philippine Islands in Manila, the nation’s biggest lender by market value.

The yield on the 8 percent bonds due July 2031 fell nine basis points, or 0.09 percentage point, to 5.08 percent, according to prices from Philippine Dealing & Exchange Corp. The rate has declined 42 basis points in 10 days.

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