The Philippine peso headed for its biggest weekly advance since January, after data showed an increase in the amount of money sent home by workers living abroad.
Remittances, which accounted for 9 percent of gross domestic product in 2014, climbed 4.2 percent in February from a year earlier, the central bank reported on Wednesday. That compared with a 0.5-percent increase in January. The peso rose, even as foreign funds pulled $103 million from local shares in the first four days of the week, exchange data show. “You’ve seen a rebound in remittances,” said Joey Cuyegkeng, an economist at ING Groep NV in Manila. “There were foreign sellers in the stock market. Apparently, those investors were taking profits without going out from the Philippine market.”
The peso gained 0.4 percent since April 10 and 0.2 percent on Friday to 44.355 a dollar as of 11:21 a.m. in Manila, prices from Bankers Association of the Philippines show. That’s the biggest gain since the five-day period ended January 23, and takes the currency’s advance this year to 0.8 percent.
The central bank announced this week details of a new deposit facility for banks, part of its efforts to curb liquidity and influence market interest rates more effectively. Banks will have to compete in weekly auctions for a fixed volume of term deposits, with tenors ranging from one month to one year, Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said April 13.
The yield on the benchmark 10-year bonds fell four basis points, or 0.04 percentage point, to 4.12 percent this week through Thursday, according to an end-of-day fixing from Philippine Dealing & Exchange Corp.
Bloomberg News