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THE
Philippine peso fell to the lowest level in 18 months as
the worsening credit crisis prompted investors to avoid
emerging-market assets. Government bonds declined.
The peso
dropped for the third time in four days as the nation’s
benchmark stock index slumped the most in more than
eight months amid the global rout in equities. Overseas
investors sold more Philippine shares than they bought
for a fourth day, stock exchange data show.
“Risk
aversion continues as the credit crisis spreads outside
of the US, prompting investors to stay away from
emerging markets,” said Rafael Algarra, treasurer at
Security Bank Corp.
The peso
lost 0.7 percent to P47.75 versus the dollar at the 4
p.m. close of trading on Wednesday, according to the
Bankers Association of the Philippines. The currency
touched P47.81, the weakest level since May 2007.
“The
market’s concern has moved over to the growth side from
inflation,” Algarra said. The government on October 2
cut its 2008 growth target to 4.4 percent, compared with
a 7.2 percent expansion last year.
President Gloria Arroyo on Tuesday said her economic
managers will draw up a “contingency plan” to cope with
the possible recession in the US, the biggest buyer of
Philippine products and largest source of remittances.
“Our
economy is strong enough to withstand the external
turmoil,” Arroyo said in a speech. Money from Filipinos
working abroad may boost the peso to around 45 per
dollar by year-end, Security Bank’s Algarra said.
Ten-year
government bonds fell for a second day.
The
yield on the 5.875-percent note due January 2018 rose 7
basis points to 8.01 percent, according to the 11:15
a.m. fixing at Philippine Dealing & Exchange Corp. on
Wednesday. The price declined 0.43, or P43 per P10,000
face amount, to 86.15. A basis point is 0.01 percentage
point. (Bloomberg) |
