MANILA -- The Philippine peso ended the shortened week’s trading a little stronger against the US dollar but the Philippine Stock Exchange index (PSEi) declined after economic managers announced their recommendation to go ahead with the oil excise tax hike in 2019.
The local currency finished Thursday at 52.45 from 52.585, which a trader explained also follows the direction taken by other units in the region.
Relatively, BPI, in a market report, said investors “priced a possibility of fewer Fed rate hikes in the coming months.”
This, after noting that Federal Reserve Chairman Jerome Powell said interest rates are just below the neutral rate.
BPI said market players saw Powell’s statement, delivered in a speech at the Economic Club of New York on Wednesday, as dovish and contrary to his earlier stance hinting for additional rate increases.
With this particular factor, the peso opened the day better than the greenback at 52.47 from 52.67 Wednesday.
The unit strengthened to as high as 52.29 but also moved to 52.28, resulting in an average of 52.389.
Volume reached USD1.16 billion, up from the USD1.05 billion a day ago.
The currency pair is seen to trade between 52.40 and 52.70 on Monday.
On the other hand, the main stock gauge ended the week lower by 0.20 percent, or 14.58 points, to 7,367.85 points.
BPI said the main index was up most of the year in line with its counterparts overseas “but it suddenly fell at the last minute after government officials said that they are re-assessing their decision to suspend the oil tax hike scheduled in 2019.”
On Thursday, economic managers, in a special meeting, approved the recommendation to continue with the scheduled PHP2 per liter excise tax increase on oil products after global oil prices have declined to below USD70 per barrel from over USD80 percent last October.
Under the Tax Reform for Acceleration and Inclusion (TRAIN) law, the oil excise hike next year may be suspended if oil prices averages USD80 per barrel in the last three months of this year.
With the combination of these developments, most of the other indices also ended in the red, with the broader All Shares down by 0.05 percent, or 2.05 points, to 4,441.33 points.
Holding Firms posted the highest drop at 0.71 percent and was followed by Services, 0.68 percent; Industrial, 0.52 percent; and Mining and Oil, 0.26 percent.
Volume reached 1.32 billion shares with amount soaring to PHP20.1 billion.
Advancers led decliners at 112 to 78 while 52 shares were unchanged. (PNA)
