Peso rebounds, but stays above P64; PSEi slumps
The peso snapped its six-session streak of record lows on Wednesday, strengthening 14.5 centavos, or 0.23 percent, to P64.025 per US dollar from Tuesday’s record-low close of P64.17, while the Philippine Stock Exchange Index (PSEi) plunged 107.64 points, or 1.87 percent, to 5,653.55 as oil-price pressures and inflation concerns continued to weigh on sentiment.
Despite the recovery, the peso remained above P64 per dollar after hitting a fresh intraday record low of P64.18. Bankers Association of the Philippines data showed the currency opened at P64.08 and traded as low as P63.94 before closing at P64.025.
The morning weighted average stood at P64.074 on volume of $745 million, while the afternoon weighted average eased to P64.051 on $917.33 million. The full-day weighted average was P64.061, with total spot-market volume reaching $1.66233 billion. The foreign exchange settlement rate was P64.074.
The peso’s record-low streak over nearly two weeks reflected several reinforcing external pressures rather than a single trigger, with reports linking the currency’s weakness to rising global crude prices and renewed Middle East tensions that threaten energy supplies.
For the Philippines, a major oil importer, more expensive crude increases the dollar cost of fuel purchases and can intensify demand for US currency, adding pressure to the exchange rate.
The country’s external position has also been a concern, with economists citing persistent dollar demand and a widening balance-of-payments deficit as vulnerabilities. A weaker peso, in turn, raises the local-currency cost of fuel and other imports, potentially adding to inflationary pressures.
The currency’s sustained decline despite the Bangko Sentral ng Pilipinas’ surprise 50-basis-point rate hike to 5.50 percent on 22 October highlights the strength of external headwinds. Investors are also watching the US Federal Reserve’s policy outlook, as elevated US interest rates and Treasury yields can support the dollar by making US assets more attractive relative to emerging-market investments.
The PSEi fell amid the peso’s recent turmoil, with only Mining and Oil advancing on Wednesday, gaining 0.41 percent, while Services posted the steepest sectoral decline at 2.95 percent. Financials, Industrials, Holding Firms and Property also finished lower.
Monde Nissin Corp. led index gainers, rising 3.33 percent, while Bank of the Philippine Islands was the biggest laggard, falling 5.05 percent.