MANILA – The Philippine peso tumbled back to the 52-to-the-greenback level on Friday but the main stocks gauge charged past the 7,700 level following the policy interest rate hike by the Bangko Sentral ng Pilipinas (BSP).
The rally was buoyed by the central bank’s decision to raise interest rates and the upbeat first quarter economic growth, analysts said.
The local currency closed the day at 52.19, weaker by 39 centavos than Thursday’s finish of 51.8.
The peso began the day’s trade at 51.95, reaching a high of 51.9 and a low of 52.21.
BSP governor Nestor Espenilla Jr. announced on Thursday that the Monetary Board (MB) has raised policy interest rates by 25 basis points — the first upward adjustment of key rates since September 2014.
The bellwether PSEi (Philippines Stock Exchange Index) gained 181.11 points or 2.39 percent to 7,752.11 at the closing bell. The broader All Shares rose by 79.24 points or 1.71 percent to 4,709.15.
Stocks across all sectors traded on a strong note.
“The BSP’s decision to increase interest rates has provided a boost in market sentiment today as hopes are high now that inflation will be arrested,” Asiasec Equities Inc. chief equity strategist Manny Cruz told GMA News Online.
The Bangko Sentral ng Pilipinas raised on Thursday its policy rates by 25 basis points amid concerns of spiking consumer prices.
The policy-setting Monetary Board decided to increase the overnight borrowing rate to 3.25 percent from 3 percent.
“Besides the hike in interest rate, the better GDP (gross domestic product) also helped the market,” Cruz said.
The Philippine economy grew by 6.8 percent in the first quarter of the year, the second fastest growing economy in Asia, fueled by government spending.
First Grade Finance Inc. president and managing director Astro del Castillo said investors “opted to ignore the political noise” and focused on the “positive news” such as the upbeat first quarter economy and the central bank’s interest rate hike decision.
In a landmark decision, the Supreme Court (SC) ousted on Friday its chief justice for supposedly failing to meet the integrity requirement for members of the judiciary.
Foreign funds bought P3.276 billion worth of shares and sold P2.705 billion for a net buying position of P571.149 million.
More than 673.229 billion shares valued at P5.688 billion, changed hands. Advancers led decliners, 116 to 80, and 49 issues were unchanged.
“However, the thin volume does not necessarily translate that the market is out of the woods yet,” Del Castillo said, noting that the likelihood of fluctuations in the coming days.
Week-on-week, the main index surged by 205.92 points or 2.73 percent from 7,546.19 on May 4. The benchmark index lost 972.02 points or 11.14 percent from 8,724.13 on Jan. 3, the first trading day of 2018. (GMA News)
