Peso loses ground, PSEi tumbles to 7,200-level

By Filane Mikee Cervantes

July 5, 2018, 6:48 pm

MANILA -- Both the Philippine peso and the local bourse ended in the red on Thursday after news broke out of a higher-than-expected June inflation.

The local unit ended the trading at 53.42 to the dollar from Wednesday's close of 53.36.

It opened the day at 53.41, and hit a high of 53.36 and a low of 53.44.

Meanwhile, the bellwether Philippine Stock Exchange index lost 114.85 points, or 1.56 percent, to close at 7,233.57 points.

The broader All Shares was down by 1.04 percent, or 46.42 points, to 4,407.62 points.

All the other indices tracked the main gauge but the day's most battered was Holding Firms with a 2.09 percent dip; followed by Industrial, 1.32 percent; Financials, 1.25 percent; Property, 0.75 percent; Services, 0.65 percent; Mining and Oil, 0.02 percent.

Volume for the day reached 680.838 million shares amounting to PHP5.20 billion.

Losers led gainers at 113 to 75 while 60 shares remained unchanged.

Actual inflation rate in June exceeded the government’s outlook as it stood at 5.2 percent, a record-high in more than five years.

Data released by the Philippine Statistics Authority (PSA) Thursday showed that price pressures accelerated faster than May 2018’s rate of 4.6 percent.

“It was primarily brought about by higher annual rate posted in the heavily-weighted food and non-alcoholic beverages index at 6.1 percent,” the PSA explained.

For food items alone, index went up to 5.8 percent in June mainly contributed by higher prices of corn with inflation rate of 14.1 percent; vegetables, 8.6 percent; meat, 5 percent; and rice, 4.7 percent.

Other contributors to higher inflation last month were alcoholic beverages and tobacco which rose 20.8 percent; transport, up 7.1 percent; and housing, water, electricity gas, and other fuels, up 4.6 percent.

Meantime, First Grade Holdings managing director Astro del Castillo said financial and capital markets are being pulled down by the uncertainty generated by June's inflation figure, which did not completely catch them by surprise.

"Investors are watching closely what steps the Bangko Sentral will take to manage inflationary pressures. We think they are likely to implement another interest rate hike to try to arrest the surge in inflation. This is the way to control it (inflation) at this point," he added. (PNA)