THE Philippine peso closed at a fresh record low of P62.68 against the US dollar on Friday, while Philippine shares fell as oil prices soared above $100 per barrel amid the continuing US-Iran war, which heightened concerns over inflation and economic pressures.
The peso weakened from Thursday’s close of P62.535, extending losses after recovering over the previous two trading sessions from its earlier record-low close of P62.625 on Tuesday.
It reached an intraday low of P62.775 before paring some losses at the close, based on Bankers Association of the Philippines data.
Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the peso remained under pressure as oil prices breached the $100-per-barrel (bbl) level, favoring demand for the US dollar.
“The USD/PHP weakened to 62.680 as oil broke the $100/bbl, favoring demand for the greenback,” Ravelas said.
He expects the peso to remain under pressure and trade within the P62.60 to P62.90 range in the near term. Union Bank of the Philippines chief economist Ruben Carlo Asuncion said market participants were also positioning ahead of the closely watched US August inflation report, which could influence expectations for next week’s Federal Reserve (Fed) policy decision.
“The peso weakened further to 62.68 per US dollar on Friday from 62.535 previously as market participants positioned ahead of the closely watched US August inflation report,” Asuncion said.
He added that firm dollar demand persisted amid expectations that persistent inflation pressures could keep the Fed’s policy stance restrictive for longer.
At the Philippine Stock Exchange, the benchmark index fell 37.42 points, or 0.61 percent, to close at 6,061.81, while the broader All Shares index declined 0.74 percent to 3,358.40.
Luis Limlingan, Regina Capital Development Corp. head of sales, said the local bourse remained under pressure from surging crude prices and the weaker peso.
“The local bourse ended lower amid continued pressure from surging crude prices, with oil trading near $108 per barrel amid the US-Iran conflict,” Limlingan said.
He said elevated oil prices raised concerns over inflation and macroeconomic conditions, while the weaker local currency further prompted investors to reduce risk exposure.
Philstocks Financial Inc. research manager Japhet Tantiangco likewise said inflation concerns weighed on sentiment amid the spike in global oil prices and the weakness of the peso.
“Both pose upside risks to consumer prices,” Tantiangco said, adding that rising global bond yields also weighed on the local market.
Trading was tepid, with net value turnover at P5.83 billion. Foreign investors were net sellers, with P999.47 million in net outflows recorded.
Most sectoral indices declined, with mining and oil down 3.27 percent, losing the most, while property shares were flat.
Among index stocks, Century Pacific Food Inc. was the top gainer, rising 5.31 percent to P33.70, while GT Capital Holdings Inc. was the biggest decliner, falling 3.44 percent to P448.80.
