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'Hot money' in PHL stocks buoys peso

The peso appreciated against the greenback on Friday, as foreign investors plunked money into the Philippine Stock Exchange (PSE) on the heels of an eight-point economy policy issued by the presumptive President Rodrigo Duterte.

The local currency closed at P46.555:$1, up P0.085 centavos from 46.640 on Thursday.

The macroeconomic policy spelled out by presumptive Duterte is amenable to the global financial community, according to financial service firm J.P. Morgan.

"Influx from foreign investments drove the local currency stronger," said Josef Paolo Reyes, foreign exchange trader at the Development Bank of the Philippines.

Foreign buying in the local bourse amounted to P6.983 billion while foreign selling reached P6.315 billion, according to PSE data.

The mains PSEi gained 11.75 points or 1.53 percent to 7,436.79 at the closing bell.

Foreign portfolio investment is also called hot money because of the ease with which investors can place or take their money out of the country.

Nicholas Antonio Mapa, associate economist at Bank of the Philippine Islands, noted in an aftermarket commentary that foreign investors were also attracted into the stock market by healthy corporate earnings.

Week-on-week, the peso gained 535 centavos or 1.14 percent from P47.090:$1 on May 6. Year-to-date, it gained P0.505 centavos from 47.060 on December 29, the last trading day of 2015. – VDS, GMA News