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Peso sinks further to four-month low

The Philippine peso depreciated against its US counterpart for the third straight trading day on Wednesday, marking its weakest showing in over four months.

The local currency shed seven centavos to close at P56.21:$1 from Tuesday’s finish of P56.14:$1. This is the worst performance since the peso closed at P56.22:$1 on December 1, 2022.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort attributed Wednesday’s depreciation to the upward correction of the US dollar against global currencies, hitting the highest in a month.

“[T]he weaker peso recently could lead to higher import prices/costs and overall inflation,” he said in a commentary sent via mobile message.

Headline inflation clocked in at 7.6% in March, slower than the 8.6% recorded in February. Core inflation which excludes select food and energy items, however, climbed to 8.0% or the highest since March 1999’s 8.1%.

The depreciation also came despite the release of local economic data showing that the balance of payments (BOP) hit a $1.267-billion surplus in March, with the gross international reserves (GIR) among nine-month highs at $101.5 billion.

“The peso also weaker after global crude oil prices still hovered among one-month highs after the unexpected oil production cut of more than 1 million barrels per day as announced by OPEC+,” Ricafort said.

Members and partners of the Organization of the Petroleum Exporting Countries (OPEC) earlier this month announced a production cut of 1.16 million barrels per day, which they said aims to support the stability of the market.

Locally, the latest data available from the Department of Energy (DOE) show that year-to-date indicate a net year-to-date net increase of P8.65 per liter for gasoline, and net decreases of P1.95 per liter for diesel and P3.45 per liter for kerosene as of April 11, 2023.

The local equities market also posted a slump, with the main bellwether PSEi down by 18.37 points or 0.28% to 6,446.35 at the closing bell. The broader All Shares index slipped 7.40 points or 0.21% to 3,464.12.

“Philippine equities were in for a bumpy ride as investors digested the latest round of earnings, both locally and globally,” Regina Capital Development Corp. head of sales Luis Limlingan said in a separate mobile message.

“Traders have to contend with looming macroeconomic headwinds after the broader field of companies report quarterly results,” he added.

More than 441.328 million shares, valued at P3.401 billion, changed hands. Decliners led advancers, 88 to 82, and 51 issues were unchanged.—AOL, GMA Integrated News