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Peso was higher again and the PH stocks index

The local currency gained on Wednesday as optimism about US retail sales and domestic output this year boosted emotions in the local stock exchange.

As it continued to climb, the Philippine Stock Exchange index (PSEi) increased by 1.15 percent, or 80.82 points, to 7,094.86 points.

All Shares increased by 0.95 percent, or 34.59 points, to 3,692.51 points in the period that followed.

The Services gauge, which increased by 3.36 percent throughout the day, led all sectoral gauges in gains.

The Industrial sector lagged behind it by 1.49 percent, followed by Mining and Oil (0.78 percent), Financials (0.60 percent), Property (0.54 percent), and Holding Firms (0.33%).

The number of shares traded decreased to 991.91 million, worth PHP7.99 billion.

At 124 to 82, gains outnumbered losses, while 47 shares remained unchanged.

“Traders are anticipating a slew of economic reports Wednesday, including the latest data for the PPI (producer price index) and the retail sales,” said Luis Limlingan, head of sales at Regina Capital Development Corporation (RCDC). “Philippine shares continued their ascent closer to the 7,100 level.

He said that projections indicate that the PPI will fall by 0.1 percent in December 2022, reversing the previous month’s 0.3 percent growth, while retail sales are expected to have decreased by 1 percent.

Meanwhile, Limlingan reported that oil prices continued to rise “boosted by optimism for a demand revival in China.”

West Texas Intermediate (WTI) crude oil prices increased by 0.4 percent to US$80.18 per barrel, while Brent crude oil prices increased by 1.7 percent to US$85.92 per barrel.

The local currency increased from its Tuesday closing rate of 54.82 to 54.62 as a result of gains in the local stock market.

It started the day at 54.8, a lower number than the previous session’s 54.6 openings.

It fluctuated between 55.01 and 54.57, averaging 54.829.

Volume jumped from the previous session’s USD1.37 billion to USD1.43 billion.

Michael Ricafort, the chief economist at Rizal Commercial Banking Corporation (RCBC), attributed the peso’s increase to the US dollar’s decline, the PSEi’s continued ascent, the Bank of Japan’s (BOJ) decision to maintain its monetary policy settings, and optimistic projections for the Philippine economy’s output in 2023.

According to the TRAIN (Tax Reform for Acceleration and Inclusion) Law, lower individual income tax rates will be effective for most income groups beginning in January 2023, he added.

Among other things, the new TRAIN law scheduled for 2023 continues to exempt people making PHP250,000 per year from paying personal income tax, but it has cut taxes for people making PHP800,000 and under compared to their taxes from January 1, 2018, to December 31, 2022.

According to Ricafort, the TRAIN law’s reduced individual income tax rates “may result in greater consumer expenditure, which accounts for at least 70% of the GDP.

In turn, he continued, “(this) contribute to faster economic/GDP (gross domestic product) growth, as well as stronger sales, earnings/net income, and total investment valuations for some listed businesses; to also help lessen the negative consequences of increased prices/inflation recently.”

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