Philippine Markets: 02 June 2011

02 June 2011

USD/PhP: 43.215 (As of 12:00pm) PSEi: 4,324.98 + 38.52
USD/JPY: 80.94 PFINC: 956.56 + 4.12
EUR/USD: 1.4364 BDO: 58.70 +1.05
GBP/USD: 1.6340 BPI: 57.40 + 0.10
PDSTF3M: 2.5923 MBT: 70.55 + 0.55
Prices as of 12:00pm Source: Bloomberg, Reuters


Philippine Peso, Bonds Slide as Global Recovery Concerns Mount
2011-06-02 04:36:03.790 GMT


By Clarissa Batino
June 2 (Bloomberg) -- The Philippine peso fell, snapping a
five-day advance, as signs the global economic recovery is
faltering damped demand for emerging-market assets.
Government bonds declined, driving seven-year yields up by
the most in two weeks, as the Bureau of Customs said it likely
missed last month’s collection target of 26.7 billion pesos
($618 million). Moody’s Investors Service cut Greece’s credit
rating three steps to Caa1 yesterday, putting it on a par with
Cuba, and U.S. manufacturing expanded in May at the slowest pace
since September 2009.
“The Greece downgrade and weak U.S. numbers create doubt
on the sustainability of the global recovery, fanning risk
aversion,” said Radhika Rao, an economist at Forecast Pte in
Singapore. “Expectations of faster inflation in May and another
rate increase this month are supporting the peso.”
The peso fell 0.2 percent to 43.217 per dollar at the 12
noon trading break in Manila, according to Tullett Prebon Plc.
The yield on the 5.875 percent January 2018 peso bond rose eight
basis points, or 0.08 percentage point, to 5.97 percent,
according to Tradition Financial Services.
Inflation may have quickened to more than 5 percent last
month, Rao said. Consumer prices rose 4.5 percent from a year
earlier in April and May data is due to be reported by the
government on June 7. Bangko Sentral ng Pilipinas has increased
its overnight borrowing rate two times this year, most recently
by a quarter of a percentage point on May 5, and will next
review borrowing costs on June 16.



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Jonathan Ravelas
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Rhys Cruz
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