Peso nears P54:$1; PSEi rebounds

By Ed Paolo Salting  and Eireene Jairee Gomez

THE peso neared the P54:$1 mark on Monday while the stock market also rebounded to post a strong start to the week.

The currency gained 53 centavos to close at P55.11 to the US dollar, gaining for a third straight trading day.

The benchmark Philippine Stock Exchange index (PSEi), meanwhile, recovered from Friday's 1.38-percent drop by gaining 122.27 points, or 1.83 percent, for a 6,790.24 close.

The broader All Shares followed with a 55.90-point, or 1.59-percent rise, to 3,568.97.

Rastine Mercado, China Bank Securities head of research, said positive sentiment abroad had spilled over to local markets.

"Optimism continued to run high given expectations of a slowdown in rate hikes from the US Fed and an improving outlook for China and Asia," Mercado said.

"The market is now within striking distance of the 6,800-6,850 resistance, which coincides with the threshold for bull market territory (20 percent up from recent lows of around 5,700 in early October 2022)."

Philstocks Financial Inc. research associate Claire Alviar, meanwhile, said, "Investors in the US reacted positively after the US non-manufacturing PMI (purchasing managers' index) contracted, tempering rate hikes expectation this year."

Locally, "foreigners also helped lift the market as it registered a net inflow of P283.83 million."

Peso hits another record low

By Tiziana Celine Piatos

THE Philippine peso sank on Monday to another record low — P56.999 against the United States dollar — after hitting P56.985 during intraday trading.

The Bankers Association of the Philippines (BAP) said the peso lost another 22 centavos on Monday, passing the previous record of P56.77 posted at the Philippine Dealing System (PDS) last Friday.

The BAP said Monday's weighted average exchange rate was P56.94.

The lowest rate the peso has ever been against the dollar before the Monday rate was P56.45 in 2004.

The local currency has shed more than P6 (11.8 percent) in value since the start of the year. It closed at P50.999 to the dollar on January 3, the first trading day of 2022.

Rizal Commercial Banking Corp. chief economist Michael Ricafort warned that the currency could continue to slip in the coming days.

"The expected seasonal increase in importation in third quarter (July-September), in preparation for the expected increase in sales during the holiday season in the fourth quarter (especially the US Thanksgiving in November; Christmas/Yuletide in December until New Year celebrations) [is a catalyst]," Ricafort said in a September 3 report.

He said he hopes the seasonal rise in remittances from overseas Filipinos and export sales revenues converted to pesos, particularly during Christmas, could prop up the peso in the fourth quarter of this year, or from October to December.

The peso depreciated after the US Federal Reserve maintained a hawkish stance, with Chairman Jerome Powell suggesting a tight monetary policy "for some time" until inflation is under control.

Peso plunges to record low: P56.98 vs US dollar

In a September 2 tweet, ING Bank Manila's senior economist Nicholas Mapa said the Bangko Sentral ng Pilipinas (BSP) will likely keep a similar hawkish position and bring the interest rate to 4.5 percent by the end of the year.

Despite the BSP's aggressive rate hikes, the peso has remained weak this year versus the dollar.

BSP Governor Felipe Medalla earlier said the bank has done enough to stabilize the currency, and even told The Manila Times that it is not inclined to take any more steps to defend the peso.

"We can say we have done enough. This is not a peso problem; it's a dollar problem," he said.

Philippine Pesos Slides Again...

By Lilian Karunungan 

 

The Philippine peso weakened to a nine-month low on concern the Federal Reserve will scale back its monetary stimulus, reducing the flow of funds to emerging markets. Government bonds fell for a third day.

The Dollar Index advanced for a second day after U.S. data yesterday showed consumer confidence climbed to the highest level in more than five years and home prices increased by the most in seven years. Foreign funds sold $85 million more Philippine equities than they bought in the last three days, exchange data show. The Philippine Stock Exchange Composite Index fell 3.8 percent since reaching a record high on May 15. It was 0.2 percent higher today.

“People are expecting a tapering of quantitative easing in the U.S.,” said Joey Cuyegkeng, an economist in Manila at ING Groep NV. “The relatively richer valuation in the stock market has also prompted some offshore profit-taking from the Philippines.”

The peso declined 0.9 percent to 42.335 per dollar as of 10:05 a.m. in Manila, the lowest level since Aug. 30, according to prices from Tullett Prebon Plc. The currency dropped 2.7 percent this month, taking this year’s loss to 3.1 percent. 

The Dollar Index, which Intercontinental Exchange Inc. uses to track the green back against currencies of six major U.S. trading partners, added 0.17 percent to 84.244. The Fed purchases $85 billion of bonds monthly.

The yield on the government’s 8 percent bonds due July 2031 rose 15 basis points to 4.15 percent, according to prices from Tradition Financial Services.

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