PESO GAINS, CLOSES AT 51.66:$1
MANILA, February 24, 2006 (STAR) The peso gained 21.50 centavos yesterday, settling at 51.660 from Wednesday’s close of 51.875 to a dollar as concerns about a threat to President Arroyo’s leadership eased.
The currency has rebounded from the three-week low it touched on Feb. 21, a day after an explosion near Malaca-ñang palace.
The peso hit a high of 51.650 minutes before it opened at 51.900 to the dollar. Transaction was heavy with total turnover hitting $629.50 million.
The government has been raising taxes to try to cut the country’s budget deficit and bond sales, giving the peso the biggest gain of any currency in Asia last year.
"The political risk built into the peso is probably a little too much,’’ said James Malcolm, a currency strategist at Deutsche Bank AG in Singapore. Malcolm said he’s recommending investors place bets that will benefit when the peso gains.
The peso has increased more than two percent in the past month.
The currency has gained 0.6 percent after it weakened to 52.10 to the dollar on Feb. 21, the lowest since Feb. 2.
The currency’s "natural price" is stronger than 50, the President told reporters at a briefing in Manila earlier.
Teves okays grant of sovereign guaranty to P20-B NDC bonds By Marianne V. Go The Philippine Star 02/24/2006
All is clear for the flotation of some P20-billion worth of National Development Co. (NDC) bonds this year following the decision of the Department of Finance (DOF) to finally extend a sovereign guaranty for the proposed borrowing.
Trade and Industry Secretary Peter B. Favila confirmed yesterday that Finance Secretary Margarito Teves has approved the grant of sovereign guaranty for the NDC bonds, the proceeds of which would be used for the government’s pump-priming effort this year.
The NDC bonds, Favila said, would be offered in two tranches of P10 billion each with the first tranche to be offered by next month.
The DOF and the NDC are finalizing the details of the bond float. However, Favila said, a review of the revenue stream for the first two months of the year would be conducted and a decision may still be made to reduce the amount of the planned NDC bond flotation.
Government financial institutions (GFIs) led by the Development Bank of the Philippines and the Land Bank of the Philippines, Favila said, would likely handle the bond flotation.
NDC is the investment arm of the Department of Trade and Industry (DTI).
Late last year, the NDC had to postpone a planned bond flotation to fund infrastructure projects of the Philippine Infrastructure Corp. (PIC) because of government’s reluctance to extend a sovereign guaranty for the NDC bonds.
The Arroyo government, Favila said, has identified five sectors for pump priming.
These are education, housing, food, health services and public works.
The government, Favila added, wants to frontload most of the expenditures at the start of the year.
Thus, government, Favila said, would fund projects that are already ready for implementation instead of lining up prospective projects that would still have to pass through a lengthy evaluation process.
The Department of Agriculture, in fact, Favila said, has identified an initial P3 billion project ready for implementation.
Chief News Editor: Sol Jose Vanzi
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