Philippine peso declines the most in two months

Manila: The Philippine peso dropped the most in more than two months and bonds slid after eight tourists were killed in a bus siege in Manila yesterday.

The currency declined for a third consecutive day as the nation's benchmark stock index slumped the most since June. The hostage crisis won't affect monetary policy as its impact on the markets won't be "significant," central bank Governor Amando Tetangco said.

"I think the market was really due for a correction, and yesterday's event was just a trigger," said Toto Hilado, treasurer at Rizal Commercial Banking Corp. "I doubt it would have far-reaching implications since it's an isolated incident."

The peso slid 1 per cent, the most since June 7, to 45.54 per dollar, according to prices from inter-dealer broker Tullett Prebon Plc.

The economy likely expanded as much as 6.9 per cent in the second quarter, slowing from growth of 7.3 per cent in the previous three months, the government said yesterday.

Growth may have slowed as an El Nino dry spell damaged crops and fisheries, Economic Planning Secretary Cayetano Paderanga said in a statement.