The local stock market took a heavy beating yesterday, and the Philippine peso returned to the 61-per-dollar territory as investors struggle to cope up with uncertainties over the US-Iran peace negotiations.
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It was observed that the benchmark Philippine Stock Exchange index plummeted by 1.64 percent or one hundred point thirty-three points to close at 6,035.02, while the broader All Shares index plunged by 1.17 percent or 39.69 points to 3,341.08. Massive losses were recorded across the trading floor as persistent demand for the greenback from importers and corporates outweighed the recent gains of the local currency.
Questions were raised regarding institutional accountability, specifically on how the Bangko Sentral ng Pilipinas would manage the sudden depreciation. The central bank is primarily responsible for addressing the issue, as unmitigated currency outflows could result to further economic strain on the consuming public. Furthermore, the administration of President Ferdinand Marcos Jr. is closely monitored by analysts, while the Philippine president relies on economic managers to navigate the volatility.
According to informations released by the Bankers Association of the Philippines, the peso closed at 61.123 per dollar. This figure was down by 34.8 centavos from the finish of 60.775 on Friday. Moving forward, the association announced that regular trading guidelines would remain in place unless extreme volatility triggers a regulatory pause.
A representative from AB Capital Securities noted that the exchange underperformed regional peers and closed near session lows of 6,018. A statement indicated that a fourth day of peso weakness to 61.1 weighed heavily on sentiment. Last week, during the continuous trading period of Monday to Friday, the peso had strengthened to the 60 level. This occurred because markets welcomed signs of easing tensions in the Middle East, with lower oil prices and a softer dollar giving emerging market currencies room to recover.
If the pullback from Monday continues, market participants remain cautious as they assess the durability of those gains and the overarching outlook for global interest rates, inflation markers and trade flows.
Michael Ricafort, chief economist of Rizal Commercial Banking Corporation, also attributed the drop of the local bourse to mixed signals on the US-Iran negotiations over the weekend, as well as the mixed signals on the reopening of the Strait of Hormuz. The corporation stated that subsequent market advisories would be issued in the coming days.
A group of market participants remain hesitant to inject capital, reflecting broader regional anxieties. All sectors were in the red, except for holding firms which advanced by 0.58 percent. Services lost the most with 3.91 percent, followed by industrial with 1.98 percent, i.e., manufacturing and construction entities.
Trading was strong to open the week as total turnover value stood at P10.26 billion. Decliners pummeled advancers, one hundred sixteen to seventy-four, while fifty issues were unchanged.
