Peso weakens to P53:$1 on stock market decline

The Philippine peso plunged to its weakest level in over three years as it closed at P53-per-dollar as foreign funds exited the local stock market.

The local currency closed 5 centavos weaker than Thursday’s finish at P52.95:$1.

Friday’s peso exchange rate closing to a US dollar is the weakest in three-and-a-half years when the local unit ended at P53.10:$1 on December 20, 2018.

In a commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso’s weakness was due to the “decline in the local stock market.”

The local stock barometer Philippine Stock Exchange Index (PSEi) lost 228.85 points or 3.38% to close at 6,539.04, its weakest since May 17, 2022 when it closed at 6,594.66.

Ricafort said the peso’s plunge was due to the net foreign selling of $23.6 million in the local bourse “after the OECD (Organisation for Economic Co-operation and Development) reduced its global economic growth estimates, a day after a similar move by the World Bank.”

The OECD projects global growth to decelerate to around 3% this year due to the impact of Russia-Ukraine war on food and energy prices. 

Philstocks Financial senior analyst Japhet Tantiangco said inflation concerns amid the elevated oil prices and weakening peso also continued to weigh on investor sentiment.

Since the start of 2022, the peso has weakened by a total of P2.001 against the US dollar.—LDF, GMA News