Philippine Peso Weakens Past 43 a Dollar for First Time in Year

June 11 (Bloomberg) -- The Philippine peso weakened beyond 43 per dollar for the first time in a year after exports dropped more than economists forecast and unemployment rose. Bonds due in 2031 fell.

The peso has lost 2.3 percent since June 7, its biggest two-day drop since August 2007. Overseas shipments slipped 12.8 percent in April, official figures showed today, compared with a 5.3 percent estimate in a Bloomberg survey. The jobless rate climbed to 7.5 percent, the highest in three years. Standard & Poor’s raised its outlook on the AA+ debt rating for the U.S. to stable yesterday, adding to speculation the Federal Reserve may cut its monthly bond purchases.

“Exports have been wallowing, in line with what we’ve seen in other Asian economies,” said Joey Cuyegkeng, an economist at ING Groep NV in Singapore. “That adds to the weakness in Asian currencies including the peso. The S&P outlook upgrade for the U.S. allows monetary policy some leeway.”

The peso declined 1 percent to 43.235 per dollar in Manila, according to prices from Tullett Prebon Plc. The currency touched 43.247 earlier, the lowest level since June 8, 2012. It has weakened 5 percent this year.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, increased 82 basis points, or 0.82 percentage point, to 8.65 percent, the highest level since November 2011.

The yield on the 8 percent government bonds due July 2031 climbed 15 basis points to 4.6 percent, according to prices from Tradition Financial Services. The rate reached 4.625 percent on June 7, the highest level since March.

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