MANILA -- The Philippine peso improved against the greenback on Tuesday but the Philippine Stock Exchange index' (PSEi) five-day winning-streak was cut short due to profit-taking.
The local currency ended the day at 53.095, way better than its 53.22 close Monday.
A trader said the peso was rejuvenated by a statement of Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. during a House budget hearing on Tuesday, wherein he reiterated that “the BSP stands ready to take decisive monetary policy responses” to meet the central bank’s primary mandate of promoting price stability to help ensure the economy’s growth.
BSP’s policy-making Monetary Board (MB) will have another rate setting meet on August 9, 2018 and Espenilla earlier said the Board is considering another hike in the central bank’s key rates to address any possible second round effects as inflation continues to rise.
To date, the BSP hiked rates by a total of 50 basis points, which brought the reverse repurchase (RRP) facility rate to 3.5 percent.
During the hearing, the central bank chief assured lawmakers that monetary officials expect inflation to go back to within two to four percent levels in 2019. “The BSP also supports non-monetary reforms such as the shift to the rice tariffication system and the continued implementation of TRAIN-related mitigation measures to help address supplyside inflationary pressures,” he added.
Tax Reform for Acceleration and Inclusion (TRAIN) law is the first package of the current administration’s proposed Comprehensive Tax Reform Program (CTRP). It cuts workers income tax rates and gave annual income of Php250,000 and below a tax-free rate.
The local unit’s strength showed early when it opened the day at at 53.15 from the previous session’s 53.25 start.
It further appreciated to 53.09 but also weakened to 53.22 mid-trade resulting to an average of 53.16 for the day.
Volume for the day reached USD670.81 million, higher than Monday’s USD664.5 million.
The currency pair is seen to trade between 53.10 and 53.30 Wednesday.
On the other hand, the main stocks gauge fell 1.30 percent, or 101.32 points, to 7,672.00 points.
A trader said investors took profit after the rally in the local stock market in the past days.
All the other counters also ended the day with losses, with the broader All Shares down by 0.89 percent, or 41.16 points, to 4,604.12 points.
The sectors were led by the Property, which declined by 1.72 percent, and was followed by the Financials, 1.19 percent; Holding Firms, 1.13 percent; Mining and Oil, 0.99 percent; Industrial, 0.82 percent; and Services, 0.52 percent.
Volume for the day was thin at 842.02 million amounting to Php7 billion.
Losers led gainers at 130 to 63 while 52 stocks were unchanged. (PNA)