Peso, PSEi surge as Philippines reaches upper-middle-income status

Philippine financial markets strengthened on Thursday, as investors took into account the country’s upgrade to an upper-middle-income country, a goal that the country has aspired to meet even before the COVID-19 pandemic.

The Philippine peso appreciated by 5.6 centavos to close at P51.565:$1 from Wednesday’s finish of P61.621:$1.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort attributed Thursday’s strength to the World Bank’s classification of the Philippines as an upper-middle-income country.

“(T)hat could somewhat help increase investments and credit into the country at better terms,” he said in a mobile message.

The Philippines recorded a gross national income (GNI) per capita of $4,850, exceeding the upper-middle-income threshold of $4,636 for the fiscal year.

Ricafort also cited the sharp decline of global crude oil prices and progressing talks between the United States and Iran regarding the conflict in the Middle East.

The Philippine Stock Exchange index (PSEi) gained 56.46 points or 0.93% to 6,125.72, while the broader All Shares index grew by 18.25 points or 0.55% to 3,343.03.

More than 2.064 billion shares, valued at P5.516 billion, changed hands. Advancers led decliners, 98 to 87, while 47 issues were unchanged.

“Market sentiment remained upbeat following news of an improved manufacturing PMI for June,” Regina Capital Development Corp. head of sales Luis Limlingan said in a separate message.

The S&P Global Philippines Manufacturing Purchasing Managers Index (PMI) stood at 50.9 in June, slightly higher than the 50.8 in May, and above the 50.0 threshold that separates expansion and contraction. –NB, GMA News