Philippine Bonds Due 2035 Rise a Second Day on Slower Inflation

Philippine government bonds due 2035 advanced a second day on the prospect of improved returns from fixed-income securities after inflation slowed.

Consumer prices increased 2.6 percent in April from a year earlier, the least since March 2012, official data show. Inflation continues to be within target, central bank Assistant Governor Cyd Amador told reporters in Manila on May 10 after the authority lowered its 2013 forecast to 3.2 percent from 3.3 percent last month.

Local bonds “continue to be well-supported,” said Jill Singian, a fixed-income portfolio manager at Bank of the Philippine Islands in Manila. “We still expect inflation to be well-anchored.”

The yield on the 8.125 percent bonds due December 2035 dropped three basis points, or 0.03 percentage point, to 3.98 percent as of 4:13 p.m. in Manila, according to prices from Tradition Financial Services.

The peso was at 41.220 per dollar, compared with 41.205 yesterday, according to prices from Tullett Prebon Plc. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, dropped one basis point to 4.30 percent.

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