Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Philippine Peso Falls as Spending Slump Fuels Slowdown Concern

June 4 (Bloomberg) -- The Philippine peso fell the most in a week on concern a slump in state spending will deepen the nation’s economic slowdown.

The government today said it had a budget surplus of 80.9 billion pesos ($1.8 billion) in April, the biggest excess since at least June 1994, according to data compiled by Bloomberg. Spending fell 6 percent due to lower debt expenses, the finance department said in a statement. The data show expenditures, after interest payments, grew only 0.5 percent after an average 14 percent increase in the first quarter, according to Joey Cuyegkeng, an economist at ING Groep NV.

“Government spending has actually collapsed and it doesn’t look good for second-quarter gross domestic product,” Manila-based Cuyegkeng said. “The peso could depreciate further. Portfolio investors may opt to cash in at the moment.”

The peso declined 0.2 percent to 43.875 per dollar at the close in Manila, paring its advance this quarter to 2.1 percent, according to Tullett Prebon Plc.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, rose 26 basis points, or 0.26 percentage point, to 4.94 percent.

Philippine economic growth in the three months through March slipped below 6 percent for the first time in nine quarters, official data showed last week. GDP increased 5.7 percent after a 6.3 percent gain in the previous period. The median estimate in a Bloomberg survey was 6.4 percent.

Three-year government bonds gained for a second day. The yield on the benchmark 2.875 percent notes due May 2017 dropped three basis points to 2.91 percent, according to noon fixing prices from the Philippine Dealing Exchange Corp.

“Interest rates should remain relatively low” as the economy slows, Cuyegkeng said.

To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net

To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Anil Varma

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.