THE peso breached the P61 to the dollar mark for the first time on Tuesday, hitting a new record low of P61.3:$1 as demand for the greenback remained strong amid continued uncertainties.
The benchmark Philippine Stock Exchange index (PSEi) also fell, shedding 34.36 points, or 0.58 percent, to end the day at 5,866.79 — its weakest close in over five months.
The broader All Shares likewise slipped by 14.73 points, or 0.44 percent, to 3,320.40.
Both the peso and stock market have now declined for five straight trading days and analysts said persistent macroeconomic and geopolitical concerns were continuing to dampen sentiment.
The peso opened at P60.8:$1 — weaker than the previous record low of P60.784 hit at the end of March — and ranged from P60.77 to P61.3. Volume rose to P1.749 billion from P1.409 billion in the previous session.
A trader said the peso’s fall to a fresh low was largely being driven by the dollar’s strength.
“US rates are high, money is moving out of emerging markets, and local demand for dollars such as importers remains firm,” he said.
“The rate hike helped, yet was not enough to shift sentiment, so the currency kept weakening,” the trader added, referring to the Bangko Sentral ng Pilipinas’ (BSP) decision to raise key interest rates by 25 basis points last Thursday.
Another trader said the drop may be due to expectations of more hawkish signals from the US Federal Reserve this week following a policy meeting.
HSBC Global Research senior economist Aris Dacanay, meanwhile, said the BSP will likely allow the peso to continue to weaken.
“As long as it’s market driven, and where the direction of the volatility is managed quite well, that’s the right policy,” he said.
“I think this level is still OK.”
Meanwhile, Philstocks Financial Inc. research manager Japhet Tantiangco said the PSEi’s decline reflected sustained concerns over geopolitical tensions, inflation risks and the peso’s depreciation.
Luis Limlingan, head of sales at Regina Capital Development Corp., said selling pressure persisted as the weaker currency heightened inflation and policy concerns.
Trading Edge Consultancy chief investment strategist Ron Acoba said the peso’s break past the 61 level could continue to pressure share prices in the near term.
Trading picked up on Tuesday with net value turnover reaching P6.89 billion to P6.92 billion, above the year-to-date average. Foreign investors remained net sellers, recording outflows of P878.07 million.
Sectoral performance was mostly negative, with only mining and oil and holding firms posting marginal gains of 0.07 percent and 0.05 percent, respectively.
Industrials fell the most by 1.32 percent.
Market breadth was weak, with 117 decliners against 68 advancers, while 58 issues were unchanged.
