The Philippine peso and local shares extended losses on Friday after the Bangko Sentral ng Pilpinas (BSP) raised on Thursday the key interest rate by another 50 basis points to counter inflationary pressures.
The local currency further depreciated but at a slower pace on Sept. 23, losing a centavo to the mighty US dollar to close at 58.50. This was yet another new all-time weakest position of the peso against the greenback for the fourth consecutive trading day and the 10th in 16 trading days.
On Thursday, the United States Federal Reserve raised their policy rate by 0.75 percentage point (ppt) while the BSP raised theirs by 0.5 ppt, in turn causing the peso to depreciate by 49 centavos.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said additional increases in the US interest rates further raise the income of investors who put their money in US debt paper, which reinforce the attractiveness of the US currency.
The PSEi, on the other hand, slid 0.67 percent, or 42.17 points, to 6,259.54 while the broader All Shares index sank 0.45 percent, or 14.95 points, to 3,341.29.
Luis Gerardo Limlingan, head of sales at stock brokerage house Regina Capital Development, said the PSEi’s close below 6,300 was due to growing recession worries arising from the aggressive monetary tightening by central banks around the world.
“Investors digested the recent 50-bp rate further hike made by the BSP, which also influenced the market’s direction,” Limlingan added in a note to investors.
A total of 491.33 million shares valued at P4.83 billion changed hands on Friday, data from the stock exchange showed.
PSE subsectors were mixed with industrial, mining and oil and services rising while holding firms, property and financials pulled back.
Converge ICT Solutions recovered from a sharp selloff the previous day after it announced a P1.5-billion share buyback program.
Ayala Land Inc. was the most actively traded stock as it slipped 2.15 percent to P25 per share.
It was followed by San Miguel Corp., flat at P97.65; International Container Terminal Services Inc., up 0.5 percent to P181.90; SM Investments Corp., down 1.4 percent to P808; and Metropolitan Bank & Trust Co., down 0.29 percent to P51.85 per share.
SM Prime Holdings Inc. was down 0.44 percent to P34.05; Bank of the Philippine Islands, down 0.85 percent to P93.20; Converge ICT Solutions, up 1.47 percent to P15.14; Globe Telecom, up 1.49 percent to P2,174 and Semirara Mining and Power Corp., down 0.12 percent to P41 per share.
Advancers nearly matched losers 95 to 92 while 42 companies closed unchanged, stock exchange data showed.