Peso unmoved, local stocks downed by lackluster GDP

The peso ended the day at 53.09 from 53.07 a day ago, which a trader said is contrary to the performance of other currencies in the region. (Shutterstock photo)

MANILA — The lower-than-expected growth of the Philippine economy in the second quarter of 2018, which was at a lackluster six percent, resulted in the negative close of the Philippine Stock Exchange index (PSEi) but the peso managed to stay firm.

The peso ended the day at 53.09 from 53.07 a day ago, which a trader said is contrary to the performance of other currencies in the region.

The trader pointed the risk aversion to the slowdown of growth, as measured by gross domestic product (GDP), from April to June this year from quarter-ago’s 6.6 percent but this remains among the strongest in the region.

Growth in the second quarter this year was driven by the manufacturing, trade and construction.

The unit opened at 53.055, weaker than the 52.93 a day ago.

It traded between 53.185 and 53.035, resulting to an average of 53.107.

Volume reached USD682.1 million, lower than then USD721.15 million Wednesday.

The currency pair is seen to trade between 53.

00 and 53.20 Friday.

During the day, the central bank’s policy-making Monetary Board (MB) hiked the Bangko Sentral ng Pilipinas’ (BSP) key rates by 50 basis points, bringing the total rate increase to date to 100 basis points.

Asked wether the rate hikes to date will help the peso, BSP Governor Nestor A. Espenilla Jr., in a briefing, said: ”We hope so.”

Also, BSP Deputy Governor Diwa Guinigundo said the rate hikes is “not primarily focused on addressing volatilities in the foreign exchange market.”

He said the main reason for the policy decision is to ensure that inflation will remain within the government’s target range, which in turn, is the mandate of the BSP.

On the other hand, the main stocks gauge fell 0.39 percent, or 30.75 points, to 7,820.71 points, which another trader also pointed to the GDP report.

However, the broader All Shares rose by 0.

15 percent, or 7.21 points, to 4,715.82 points.

It was also a mix for the sectoral indices, with Industrial and Property rising by 0.31 percent and 0.08 percent, respectively.

Meanwhile, Holding Firms registered the highest drop at 0.44 percent and was followed by Financials, 0.38 percent; Mining and Oil, 0.37 percent; and Services, 0.13 percent.

Volume reached 1.13 billion shares amounting to Php6.3 billion.

Losers led gainers at 121 to 90 while 34 shares were unchanged.