Philippine Peso Advances on Bets Economy Will Sustain 7% Growth
The Philippine peso rose after the central bank signaled economic growth should meet the upper-end of the government’s forecast range this year based on investment, local consumption and spending. Bonds gained.
Gross domestic product will increase 6 percent to 7 percent in 2013 and may even surpass that prediction made by the administration of President Benigno Aquino, Deputy Governor Diwa Guinigundo told state-owned television yesterday. Growth last year may have exceeded the 5 percent to 6 percent target, Economic Planning Secretary Arsenio Balisacan said yesterday.
“Positive sentiment on 2013 expectations on the Philippines is pushing investors to buy local assets, causing peso strength,” said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc., the nation’s largest lender.
The peso advanced 0.1 percent to 40.847 per dollar at the close in Manila, prices from Tullett Prebon Plc showed. It appreciated 6.8 percent last year, a performance second only to South Korea’s won among Asia’s 10 most-active currencies, data compiled by Bloomberg show.
One-month implied volatility, a measure of expected moves in exchange rates used to price options, fell 10 basis points, or 0.10 percentage point, to 4.2 percent.
The economy expanded 7.1 percent in the third quarter, the fastest pace since 2010. The government will report fourth- quarter and full-year numbers on Jan. 31.
The Philippine Stock Exchange Index (PCOMP) climbed 0.1 percent and closed at a record after rising 1.2 percent yesterday to an all- time high.
“This record-breaking advance is reflective of sustained investor confidence in the local bourse and is an indicator of the bullishness and vibrancy of the Philippine economy,” presidential spokeswoman Abigail Valte said yesterday in an e- mailed statement.
The yield on the 6.25 percent government bonds due November 2016 dropped seven basis points to 3.96 percent, according to midday fixing prices at Philippine Dealing & Exchange Corp.
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