Manila: The Philippine peso dropped, snapping a four-day gain, as the World Bank forecast slower Asian growth and said regional policy makers have room to cut borrowing costs. Government bonds due 2037 fell before a price-setting auction.
Expansion in developing East Asia will probably cool to 7.2 per cent this year from 8.3 per cent in 2011, the Washington-based lender said in a report on Monday. That would be the slowest pace since 2001 and lower than the 7.6 per cent forecast in May. The central bank is not ruling out a further interest-rate reduction, Governor Amando Tetangco said on October 5. Consumer-price gains have stayed below 4 per cent since February after remaining at or above that level for all of last year, official data show.“Another rate cut is possible given that we have tame domestic inflation coupled with a weak global outlook,” said Raul Tan, head of the balance-sheet segment at Rizal Commercial Banking Corp.’s Treasury Group in Manila.
The peso fell 0.2 per cent to 41.495 per dollar at the noon trading break in Manila, prices from Tullett Prebon Plc show. The currency advanced 0.7 per cent last week. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 5.30 per cent.
