MANILA -- The trade war between United States and China continues to drag the Philippine peso, but the local bourse seems to have worn out the effects of the external headwind.
On Monday, Philippine peso continues to depreciate against a U.S. dollar on Monday, closing the day at 54.23 from 54.04-close last Friday.
It opened the day weak at PHP54.12 to a greenback from last week’s opening of PHP54.03.
The currency pair traded between PHP54.12 and PHP54.28 to a dollar, with a weighted average of PHP54.21.
Volume of trade on Monday increased to USD670.6 million from USD669.9 million Friday.
Dutch bank ING reported that the China-US trade spat, along with rising oil prices, hawkish U.S. Federal Reserve, and appreciating dollar, hit almost all emerging market currencies in Asia.
But three Asian currencies are hardly hit by these headwinds -- the Indian rupee, the Indonesian rupiah, and the Philippine peso.
“The tie that binds the rupee, the rupiah and the peso is their external deficits. All three countries run current account deficits due to the mix of aggressive infrastructure investment, strong consumer demand, and the 2018 oil price surge bloating their respective import bills,” ING Bank’s report authored by the bank’s economist for Asia Prakash Sakpal and senior economist for the Philippines Nicholas Mapa.
On the other hand, the economists noted that the wider deficit of these Asian countries reflect the strong growth of their economies.
“To a large extent, the widening trade deficit of these three countries is also a reflection of their strong growth. India, Indonesia and the Philippines are all posting robust growth numbers on the back of strong household consumption and the investment cycle,” the ING Bank said.
“For example, the Philippines has seen a substantial build-up in capital goods imports, ostensibly linked to the accelerated pace of gross domestic capital formation in the first half of 2018,” it added.
Meanwhile, the Philippine Stock Exchange index (PSEi) improved by 0.69 percent or 50.61 points to close at 7,433.61 on Monday.
All shares also increased by 0.54 percent or 24.12 points to 4,531.52 points.
Among industries, only the industrial and the property declined their shares by 0.46 percent to 11,070.69 points and by 0.53 percent to 3,668.23 points, respectively.
Financials led the improvements with 1.92-percent increase to close at 1,680.96 points. This is followed by mining and oil, up by 1.77 percent to 9,199.20 points, holding firms by 1.14 percent to 7,190.51 points, and services by 0.84 percent to 1,517.84 points.
Value of trade at the PSE reached PHP4.57 billion on Monday.
“Investors picked up a few more names after the meteoric rise Friday, as the effect of trade tension seems to have temporarily worn out,” said Land Bank of the Philippines Market Economist Guian Dumalagan.
“The market’s immediate reaction to Trump’s tariff action and resultant retaliatory step by China was greeted with a snap rally. However, this may be short lived with the upcoming FOMC (Federal Open Market Committee) and the BSP (Bangko Sentral ng Pilipinas) meetings on Wednesday and Thursday, respectively,” Dumalagan added. (PNA)
Staying true to its promise of bringing the services closer to the people, Philippine Charity Sweepstakes Office (PCSO) has opened its 67th branch in Agusan del Sur recently. “Napakalayong lugar ito kaya nga dapat magkaroon ng isang branch doon para mabigyan ng tulong ang ating mga kababayan...