Philippine Peso Gains Most in Three Months on Remittance Inflows
The Philippine peso rose the most in more than three months on speculation overseas remittances picked up during the holiday period. Government bonds gained.
Funds sent home by Filipinos overseas, which make up about 10 percent of the Philippine economy, grew 5.8 percent from a year earlier to $17.5 billion in the 10 months through October, official data show. The peso appreciated 6.8 percent last year, its best performance since 2007. Local financial markets were shut Dec. 31 and Jan. 1 for the New Year holidays.
“This is the normal build-up of dollar supply over the long weekend from overseas remittances that have been converted into pesos,” said Joey Cuyegkeng, an economist in Manila at ING Groep NV.
The peso strengthened 0.5 percent to 40.853 per dollar at the close in Manila from Dec. 28, the biggest gain since Sept. 14, according to Tullett Prebon Plc. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, fell 20 basis points, or 0.2 percentage point, to 4.3 percent.
The Bloomberg-JPMorgan Asia Dollar Index gained 0.2 percent today after the U.S. House approved a bill averting income tax increases for more than 99 percent of households, which could have triggered a recession in the world’s largest economy. The passage is a victory to President Barack Obama even as Republicans vowed to fight him in coming weeks for spending cuts in exchange for raising the debt ceiling.
The yield on the Philippines’ 6.125 percent bonds due October 2037 fell three basis points, or 0.03 percentage point, to 5.57 percent, according to prices from Tradition Financial Services.
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