COVID-19 remains a drag on peso

The Philippine peso depreciated against the US dollar on Friday as concerns over the global economic impact of the coronavirus (COVID-19) epidemic prompted investors to shy away from financial markets.

The local currency shed 15.5 centavos to close at P50.97:$1 from Thursday’s finish at 50.815.

“The peso exchange rate weakened today to close at 50.97, the weakest in a month and among the weakest in 4 months (but still among the strongest in 2 years) vs. yesterday's 50.815 after the latest declines in the local stock market,“ Rizal Commercial Banking Corp. chief economist Michael Ricafort said.

On the local bourse, the benchmark PSEi closed at 6,787.91 — its lowest since Dec. 27, 2016 when it finished at 6,658.20, due to concerns over COVID-19.

“Continued increase in global risk aversion amid lingering concerns that the coronavirus could spread to other countries outside of China and further slow down global economic growth caused further sell off in riskier assets worldwide such as in the US/global stock markets and in other Emerging Markets,” Ricafort said.

The peso also weakened due to heavy foreign selling in the PSE.

“The peso is also weaker after huge net foreign selling at the local stock market today, at -$80.1 million, the most in more than three months, after yesterday's -$27.5 million,” Ricafort said. —LDF, GMA News