MANILA – Expectations for another cut in the Bangko Sentral ng Pilipinas’ (BSP) key policy rates boosted the local equities market Monday but the peso weakened against the US dollar.
The Philippine Stock Exchange index (PSEi) rose 1.82 percent, or 100.15 points, to 5,610.98 points.
All Shares gained 1.45 percent, or 48.19 points, to 3,380.63 points.
Mining and Oil led the sectoral indices after it improved by 4.03 percent and was trailed by the Industrial, 3.71 percent; Property, 3.24 percent; Services, 2.44 percent; Holding Firms, 0.41 percent; and Financials, 0.40 percent.
Volume totaled to 539.99 million shares amounting to PHP5.20 billion.
Gainers led losers at 112 to 70, while 46 shares were unchanged.
A trader attributed this partly to statements by BSP Governor Benjamin Diokno about Philippine monetary officials’ readiness to further cut the central bank’s overnight reverse repurchase (RRP) rate to below its 2018 level of 3 percent to help address the impact of the coronavirus disease 2019 (Covid-19) global pandemic.
BSP’s key policy rates were increased by a total of 175 basis points from 2018 to 2019 in a bid to address the elevated inflation rate which peaked at 6.7 percent in 2018 due to supply-side pressures.
The rate of price increases continues to decelerate since then and this is the main factor for the reversal of the rate hikes since 2018.
Since September 2018, the central bank’s key rates have been reduced by a total of 100 basis points and Diokno said “a deeper cut is warranted in response to the expected sharp economic slowdown” as a result of the global pandemic.
To date, the BSP’s RRP rate is at 3.25 percent, the overnight deposit rate at 2.75 percent, and the overnight lending rate at 3.75 percent.
On the other hand, the local currency ended the day at 50.959 to a US dollar, weaker than its 50.585 Wednesday last week.
There was no trading last April 9 and 10 because Maundy Thursday and Good Friday have been declared regular holidays.
The peso opened the day at 50.62 and traded between 50.57 and 50.65. The average level for the day stood at 50.616.
Volume totaled to USD194.2 million, lower than the USD521 million in the previous session. (PNA)
