The Philippine peso’s exchange rate fell and Philippine bonds gained after policy makers cut the 2013 inflation forecast, following official data that showed prices rose at the slowest pace in 30 months in March.
Inflation will probably average 3.3 percent next year, compared with a previous prediction of 3.4 percent, central bank Deputy Governor Diwa Guinigundo said on April 19. The Bureau of Internal Revenue collected 75.2 billion pesos ($1.8 billion) in March, an increase of 3.64 billion pesos from a year earlier, the tax office reported today. Collections missed the goal of 82.26 billion pesos, the government said in a Twitter account.
“There’s a sense that inflation may remain benign, which is translating to better prices for government securities,” said Rafael Algarra, executive vice president of financial markets at Security Bank Corp. in Manila.
The yield on the 6.5 percent bonds due April 2021 fell five basis points, or 0.05 percentage point, to 5.35 percent as of 4:13 p.m. in Manila, according to ICAP Plc.
The peso slipped 0.2 percent to 42.673 per dollar, prices from Tullett Prebon Plc showed. One-month implied volatility, a measure of exchange-rate swings used to price options, dropped to 5.1 percent from 5.3 percent.
Bangko Sentral ng Pilipinas kept its benchmark interest rate at a record low 4 percent last week and held the inflation estimate for this year at 3.1 percent. The central bank’s official price target is an average 3 percent to 5 percent for this year and next. The cost of goods in the economy rose 2.6 percent in March, slowing from 2.7 percent the previous month.