Philippine Peso Declines as Overseas Investors May Sell Stocks

By Karl Lester M. Yap

Sept. 15 (Bloomberg) -- The Philippine peso fell on speculation overseas investors will step up sales of the nation's stocks.

The local currency extended a seven-week slide on concern global funds will shun emerging-market assets as Lehman Brothers Holdings Inc. neared bankruptcy after potential buyers abandoned talks. Foreign funds sold more Philippine shares than they bought everyday this month, according to data compiled by Bloomberg.

``If Lehman declares bankruptcy, people will tend to avoid additional risks and emerging-market assets are considered risky,'' said Rafael Algarra, treasurer at Security Bank Corp. in Manila.

The local currency fell 0.1 percent to 46.96 per dollar as of 10:06 a.m. in Manila, according to Tullett Prebon Plc.

Bank of America Corp. agreed to buy Merrill Lynch & Co. for about $44 billion, a person with knowledge of the deal said, after shares of the third-biggest U.S. securities firm fell by more than 35 percent last week.

To contact the reporter for this story: Karl Lester M. Yap in Manila at kyap5@bloomberg.net.