THE local currency closed at 54.13 to the greenback on Wednesday, a slight decline compared to the 53.94:$1 close on Tuesday. The last time the peso reached the 54 level was in December 2, 2005, at 54.15 to the US dollar.
Per the web site of the Bankers Association of the Philippines, the peso opened on Wednesday at 53.9, then rose to 54.14 during the day’s trading and declined to 53.89.
Meanwhile, the Philippine Stock Exchange index (PSEi) closed at 7,449.20 points, falling 0.92 percent compared to the 7,518.01 points recorded a day ago.
Land Bank Market Economist Guian Angelo S. Dumalagan said that Philippine shares closed lower driven mainly by renewed trade tensions between China and the US. “Philippine shares closed lower once more, mostly on renewed trade tension as China lodged permission with WTO [World Trade Organization] to levy tariff on the US and crude oil rising on hurricane and the EIA [Energy Information Administration] WTI [West Texas Intermediate] outlook. US shares fell around the open after the WTO said China would ask for permission to retaliate against the US due to its failure to modify anti-dumping methodologies,” Dumalagan said.
In reports, China told the WTO on Tuesday that it wanted to impose $7 billion a year in sanctions on the US. The EIA cut its US crude output forecast to 11.5 million barrels a day in 2019 from the August estimate of 11.7 million. Production is also expected to be slightly lower this year at 10.66 million.
Last month ING Bank Manila Economist Joey Cuyegkeng said that the Bangko Sentral ng Pilipinas’s (BSP) openness to take further action to tame persistent inflationary pressures in the economy has kept the peso afloat, amid volatile global markets.
Cuyegkeng said that, while the peso weakened in line with most Asian emerging market currencies, the BSP’s recent stance kept the peso from incurring a greater depreciation during the period. In the same month, the BSP let out its most aggressive move in a decade, raising its main policy rate by 50 basis points on account of rising inflationary pressures for 2018 and 2019. This, after the Central Bank already made two 25-basis-point hikes in its previous meetings for the year.