Philippine Peso Completes Weekly Gain on Remittance Outlook

The Philippine peso completed its first weekly gain in three on speculation remittances will increase in the run-up to Christmas and as people send money to aid the victims of Super Typhoon Haiyan. Bonds fell.

Overseas Filipinos rushing to send cash to families affected by Haiyan will boost funds over the next few months, according to HSBC Holdings Plc, UBS AG, Credit Suisse Group AG and Barclays Plc. Workers based abroad typically send more money home before Christmas and New Year.

“Expected inflows from seasonal remittances” contributed to the peso’s gain this week, said Lito Mercado, head of trading at Rizal Commercial Banking Corp. in Manila. “Inflows related to typhoon Haiyan have increased.”

The peso strengthened 0.2 percent since Nov. 22 to 43.772 per dollar in Manila, prices from Tullett Prebon Plc show. The currency fell 0.1 percent today and 1.3 percent this month. It touched a 10-week low of 43.935 on Nov. 25.

Money sent home by overseas Filipinos, which increased 5.8 percent in the first nine months of 2013 from a year earlier, accounts for about 10 percent of gross domestic product.

Super Typhoon Haiyan struck the Southeast Asian nation on Nov. 8, leaving more than 5,000 people dead and displacing 3.4 million. Remittances increased by an average of 3.7 percentage points in the three months after past major disasters, Nomura Holdings Inc. said in a note this month, using data from seven calamities since 2004.

Yields Rise

Government bonds due 2031 fell this month amid speculation the Federal Reserve will soon reduce its $85 billion of monthly bond purchases, a policy that has fueled fund flows to developing nations. Ten-year U.S. Treasury yields rose 19 basis points this month to 2.75 percent.

The yield on the government’s 8 percent notes due July 2031 climbed 19 basis points this month and four basis points today to 4.44 percent, according to prices from Tradition Financial Services. The rate is at its highest level in more than a month.

“There’s pressure in the U.S. for rates to go higher, so most domestic rates are being affected like ours,” Rizal Commercial’s Mercado said.

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