By Joann Villanueva/PNA
MANILA – The Philippines’ main equities gauge recovered Tuesday but the peso weakened on expectations of fresh monetary easing by the Bangko Sentral ng Pilipinas (BSP) this year.
The Philippine Stock Exchange index (PSEi) rose 0.50 percent, or 38.82 points, to 7,747.54 points.
This improvement is also in line with a regional uptrend, BPI Research said in its market report.
The rise in the main index was mirrored by the All Shares, which went up by 0.33 percent, or 15.62 points, to 4,795.80 points.
Most of the sectors also posted gains, led by the Services, 1.48 percent, and was followed by the Industrial, 1.02 percent; Holding Firms, 0.90 percent; and Financials, 0.80 percent.
On the other hand, Property fell by 1.52 percent, and Mining and Oil, 0.66 percent.
Volume reached 1.68 billion shares amounting to PHP5.7 billion.
Decliners led gainers at 108 to 83 while 56 shares were unchanged.
On the other hand, the peso ended the day at its six-week low of 52.7 to the US dollar from 52.86 last January 27 and 52.2 on Monday.
BPI Research said statements by BSP Governor Benjamin Diokno indicating that monetary easing is in the horizon, lifted investors’ sentiment, with Diokno also noting that the peso is trading “within a reasonable band.”
Diokno, in an interview over ABS-CBN News Channel on Tuesday, said there is room for policy easing given the slowdown of domestic inflation rate, which decelerated to 3.8 percent last February from the previous month’s 4.4 percent.
Domestic inflation peaked at 6.7 percent in September to October last year on account of supply-side pressures but registered slower figures in the succeeding months after the 175 basis points increase in the BSP’s key rates and the implementation of non-monetary measures by the national government.
Diokno said that if ever they would ease rates, the policy-making Monetary Board (MB), which he chairs as BSP chief, will touch on the reserve requirement ratio (RRR) of banks since this remains among the highest in the region even after the 200-basis-point cut last year to 18 percent.
Relatively, report of the “wider-than-expected trade deficit exerted additional downward pressure on the peso,” BPI Research added.
The Philippine Statistics Authority (PSA) on Tuesday reported that exports contracted by 1.7 percent last January while imports grew by 5.8 percent.
Total exports in the first month this year amounted to USD5.28 billion, lower than the USD9.03-billion worth of exports.
This resulted in a trade deficit of USD3.76 billion, higher than the USD3.16 billion deficit in January last year.
