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PSEi drops, peso climbs amid Silicon Valley Bank crisis

Philippine financial markets closed mixed on Monday, as players digested recent developments including the closure of the Silicon Valley Bank (SVB), a key lender to American startups in the past four decades.

The local stock barometer shed 45.43 points or 0.69% to 6,544.45 at the closing bell, while the broader All Shares index slipped by 21.56 points or 0.61% to 3,518.83.

The biggest drop was seen in the financial index which declined by 2.04% to 1,798.13, followed by services by 2.02% to 1,610.62, industrials by 0.74% to 9,511.79, and property by 0.07% to 2,794.73.

Increases were seen in the index for holding firms which grew by 0.44% to 6,299.98, and mining and oil which rose by 0.007% to 10,697.46.

“Philippine shares slid following the US market’s performance last Friday. Anxiety jumped on Friday and options volume on the index soared to a near four-year high as a growing crisis at SVB Financial,” Regina Capital Development Corp. head of sales Luis Limlingan said in a mobile message.

American regulators last week closed down SVB, the country’s 16th largest bank by assets with $209 billion assets and $175.4-billion in deposits at the end of 2022.

The collapse came after SVB announced a stock offering and sale of securities, in a bid to boost its cash, dragging its shares down 60% in New York on Thursday.

Most Asian markets, including Manila, declined on Monday, amid expectations that the recent development would complicate the Federal Reserve’s plans to continue with its policy tightening.

The latest development weakened the US dollar against major global currencies, with the gauge down for the third straight trading day to hit three-week lows.

Locally, the Philippine peso gained 24 centavos to close Monday at P54.93:$1 from last Friday’s finish of P55.17:$1.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said Monday’s trading was affected by the SVB collapse, along with softer-than-expected employment data released in the United States.

“However, these are offset by measures by US regulators to protect all depositors. For now, US Treasury Secretary (Janet) Yellen said that the US Treasury would protect all depositors of SVB,” he said in a separate mobile message.

“This would help stabilize the markets for now and help restore confidence,” he added.

Moving forward, market players will await the impact of economic data to be released in the United States — the February inflation rate on March 14, the producer price index and retail sales on March 15, February building permits on March 16, and the Michigan Consumer Sentiment on March 17.

Locally, economic data expected this week are the January balance of trade on March 14, cash remittances on March 15, and the budget balance on March 17.—AOL, GMA Integrated News