Peso, Politics, Electricity And Investing

[OnMyWay]

Funny how it all fits together?  Or not?  :)

 

http://www.bloomberg.com/news/2013-12-09/philippine-peso-drop-to-three-month-low-as-aquino-mulls-subsidy.html

 

The Philippine peso fell to a three-month low and government bonds dropped on concern power subsidies being considered by President Benigno Aquino would drive up the budget deficit.

The government is evaluating whether it can use royalties from a natural gas project to subsidize power rates during months when electricity costs will spike from the maintenance shutdown of gas-fed plants, Aquino said in a speech in Manila today. Manila Electric Co., which supplies electricity to more than 5 million customers in the capital and nearby provinces, will raise prices by 4.15 pesos per kilowatt hour as soon as this month, the ABS-CBN television channel reported today.

“A subsidy, while it has all the good intentions, may send a wrong message to investors,” saidJonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila, the nation’s biggest lender. “We have done away with the system of subsidies, put our fiscal house in order and won an investment-grade rating. Subsidies were the reason why investors were moving out from some of our neighbors.”

The peso dropped 0.4 percent to 44.135 per dollar at the close in Manila, its weakest level since Sept. 9, according to prices from Tullett Prebon Plc. The currency was the worst performer in the region today and has declined 7 percent this year, the fourth-biggest loss in Asia.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, rose three basis points to 5.8 percent.

Staggered Increase

The Energy Regulatory Commission approved a staggered increase in electricity prices by Manila Electric, with 2.41 pesos per kilowatt hour to be collected this month, 1.21 pesos in February and 0.53 pesos in March, ABS-CBN News reported today.

The Philippines budget deficit narrowed to 112.5 billion pesos ($2.5 billion) in the first 10 months of the year from 115.6 billion pesos in the same period a year earlier. The nation won investment-grade status from Standard & Poor’s, Moody’s Investors Service and Fitch Ratings this year after Aquino narrowed the shortfall from a record 314 billion pesos in 2010.

The yield on the 3.875 percent bonds due in November 2019 rose two basis points, or 0.02 percentage point, to 3.25 percent, the highest since Oct. 22, Tradition Financial Services prices show.

To contact the reporter on this story: Clarissa Batino in Manila at cbatino@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

Edited December 9, 2013 by OnMyWay

[Call me bubba]

for those who have lived here a long time or been well read on the news ,business and Politics 

 to me its

1.another feel good attempt to make others happy (and win their vote)

and

2,NOT THINKING OF THE LONG TERM CONSEQUENCES of their actions

 

i have tried in the past to limit my comments on the Political situation and of politics in general and in this post

I will try the same.

 

.bear with me,, if you (always). read the news esp business & politics,

just look at some of the "proposals" that have been suggested . the hundreds if not thousands of House biils that are filed

 to better or help the country,

most if not all are not looking or considering  the LONG TERM results of their actions,,

 

2. regarding the fluctuation  of the peso. MANY factors play the part of why it goes UP or down,

the situation of using the funds is a part abet small of why the peso in the past few days has reached its current LOW

remember its the end of the year and the country soon will be awash w/the OFW $$.