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Inflation in Philippines Plunged in June

Inflation in the Philippines fell to 1.5 percent in June, from 3.3 percent in May.

June's rate of inflation is significantly different from June of 2008's 11.4 percent inflation. It links back to a plunge in energy prices, according to official figures. In the summer of 2008, the price of crude oil reached more than $140 a barrel, but this summer it is trading at about $65. The country's central bank forecast that inflation will fall to about 1 percent by the third quarter before picking up again in the fourth quarter.

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Philippines to raise $750 million Bonds

The 10.5-year bonds, (they mature on January 20, 2020, in order to stagger the government's repayment obligations) were at 100.25 by the close of Asian trading yesterday after being re-offered at 99.065. The bonds were priced with a coupon of 6.5%, which at the re-offer price gives a yield of 6.625%. This corresponded to the tight end of the initial yield guidance of 6.625% to 6.75% that was set by the three bookrunners early on during marketing. The guidance was firmed up in the early evening Hong Kong time, when investors got the message that the final yield would be fixed at 6.625%.

The Philippines returned to the Asian bond market on Monday to raise another $750 million towards its gaping budget shortfall, and as expected, investors rallied around and allowed it to price tight. The offering was supported by a significant rally in US equities during the final hours of marketing, which gave investors the confidence to buy despite a sharp contraction in credit spreads over the past few months. It also helped that the sovereign set clearly defined terms which it stuck to throughout the marketing. During the final few hours of the bookbuilding investors even had a fixed yield as a reference point for their investment decisions. "It went out with a finite size and well-defined terms and it didn't move the goal posts. But the tight pricing was also possible because of the deep domestic investor base," said a source close to the offering, who noted that it was primarily the local investors who were driving up the price in the secondary market yesterday too.

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Philippines' Gov May Offer $750 Million Bonds

Developing-nation dollar bonds have rallied this year, pushing the extra yield investors demand to own the debt over U.S. Treasuries to 4.50 percentage points from 6.90 points at the start of the year, according to JPMorgan Chase & Co.'s EMBI+ Index. The spread over Treasuries has widened from as low as 4.07 points on June 10, indicating that investors' appetite for risks is waning. "The fiscal situation in the region as a whole is more of a concern now," said Vishnu Varathan, a regional economist at Forecast Singapore Pte. "India highlighted the situation. Economies in the region have a huge impetus to raise funds."

The Philippines plans to sell up to $750 million of dollar bonds to plug a record budget deficit, its second overseas debt issuance this year. The government hired Citigroup Inc., Credit Suisse Group AG and Deutsche Bank AG to arrange the sale and the securities due January 2020 will be priced today in New York, according to an e-mail sent to investors. The bond will be priced to yield about 6.625 percent, according to people familiar with the sale, who asked not to be identified. The government is turning to global investors for funds after falling tax revenue and rising economic stimulus spending forced it to revise the budget deficit target three times this year. Emerging-market bond funds have recorded 13 consecutive weeks of net inflows as the world credit crisis eased, according to Cambridge, Massachusetts-based research firm EPFR Global.

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Inflation in Philippines Plunged in June

Inflation in the Philippines fell to 1.5 percent in June, from 3.3 percent in May.

June's rate of inflation is significantly different from June of 2008's 11.4 percent inflation. It links back to a plunge in energy prices, according to official figures. In the summer of 2008, the price of crude oil reached more than $140 a barrel, but this summer it is trading at about $65. The country's central bank forecast that inflation will fall to about 1 percent by the third quarter before picking up again in the fourth quarter.

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Philippine Inflation To Ease Further In March

The Bangko Sentral ng Pilipinas (BSP) said inflation is likely to fall within the range of 5.9 percent and 6.8 percent in March due to the downward adjustments in transport fares and electricity rates.

The Bangko Sentral ng Pilipinas (BSP) said inflation is likely to fall within the range of 5.9 percent and 6.8 percent in March due to the downward adjustments in transport fares and electricity rates. Inflation in February was at 7.3 percent. The BSP projected inflation to decline to 3.9 percent this year from 9.3 percent las year due to slower economic activities and lower oil and food prices. Inflation is expected to reach 4.7 percent in 2010. The BSP had set an inflation target range of 2.5 percent to 4.5 percent for this year and 3.5 percent to 5.5 percent for 2010.

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Philippine External Debt Continues Decline In November

The Philippines' external debt has declined as of the end of November last year on the back of prepayments and continued economic expansion.

The Philippines' external debt has declined as of the end of November last year on the back of prepayments and continued economic expansion. Consequently, the debt-to-gross domestic product (GDP) ratio has eased further. The country's external debt declined from $54.427 billion in 2007 to $53.492 billion at the end of November in 2008. The external debt to GDP ratio declined from 40.22 percent in November 2007 to 31.77 percent in November 2008.

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Philippine Factory Output Slumps to Asian Crisis Levels

The National Statistics Office said Tuesday that factory output in January have slumped to levels not seen since the 1997 Asian financial crisis due to the current global economic downturn.

The National Statistics Office said Tuesday that factory output in January have slumped to levels not seen since the 1997 Asian financial crisis due to the current global economic downturn. The country's volume of production index fell in January by 19.9 percent. The country's manufacturing firms have been cutting production since last November with a 6.6 percent contraction and continued in December at -15.4 percent. Factory output declined by 24.4 percent in November 1998, the year when the Asian financial crisis peaked.

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Philippine Government Mulls Insurance For Crisis-Hit Workers

The National Economic and Development Authority (NEDA) said it is recommending a P6-billion unemployment insurance program for Filipinos who lost their jobs due to the global financial crisis. Such a program would cover 100,000 to 200,000 jobless Filipinos.

The National Economic and Development Authority (NEDA) said it is recommending a P6-billion unemployment insurance program for Filipinos who lost their jobs due to the global financial crisis. Such a program would cover 100,000 to 200,000 jobless Filipinos. NEDA projects that around 60,000 to 200,000 jobs could be lost under the current crisis. The financial assistance, which would be provided by the Social Security System (SSS), could last up to six months, with each member getting either P5,000 or P10,000 a month, depending on the number of beneficiaries.

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Philippine Peso Least Volatile Currency In Asia

Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said that the Philippine peso has been the least volatile currency in the region, despite the steady depreciation of the peso against the dollar.

Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said that the Philippine peso has been the least volatile currency in the region, despite the steady depreciation of the peso against the dollar. The Philippines' central bank has expressed its confidence that it will not need to intervene to prop up the peso. The peso has only depreciated by 1.55 percent as of Friday. The peso's volatility rate from January up to Friday was recorded at 1.36 percent. A stable peso is important in providing a stable operating environment for businesses that plan ahead based on what they expect the foreign exchange rate would be.

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Moody's Cuts Outlook On Philippine Banks

Moody's Investors Service cut its credit outlook for the Philippine banking industry to negative over the next 12 to 18 months, saying that the slowing economy would have an adverse impact on the profits of local lenders.

Moody's Investors Service cut its credit outlook for the Philippine banking industry to negative over the next 12 to 18 months, saying that the slowing economy would have an adverse impact on the profits of local lenders. The quality of the banks' assets are expected to decline as they are burdened by non-performing assets and slowing economic growth. The declining trend in overseas Filipino worker remittances would also negatively impact the banks' strategic plans and positioning. Moody's still maintains a positive outlook for the Philippine banks' foreign currency deposit and debt ratings as wel las for the country's sovereign ratings.

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Philippines Has Little Room To Hike Deficit – ADB

The Asian Development Bank (ADB) has warned that the Philippine government does not have much fiscal room to increase its budget deficit further given the country's current GDP ratios. The ADB also expressed its support to the proposed revenue enhancement measures in Congress. The Philippine government had increased its budget deficit program to P177.2 billion or 2 percent of GDP this year from P102 billion or 1.2 percent of GDP.

The Asian Development Bank (ADB) has warned that the Philippine government does not have much fiscal room to increase its budget deficit further given the country's current GDP ratios. The ADB also expressed its support to the proposed revenue enhancement measures in Congress. The Philippine government had increased its budget deficit program to P177.2 billion or 2 percent of GDP this year from P102 billion or 1.2 percent of GDP.

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