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Despite concerns about a recession, PSEi continues to decline as the peso maintains its position.

On Wednesday, the main stock index fell once more due to concerns about the US economy entering a recession, but the peso saw little change after approaching the 59-level mid-trade against the US dollar.

The Philippine Stock Exchange index (PSEi) fell even more, falling 2.33 percent or 140.39 points to 5,879.68 points.

All Shares dropped 2.12 percent, or 68.59 points, to 3,165.64 points in the period that followed.

Among the sectoral gauges, the Mining and Oil index experienced the largest decline of 3.93 percent.

Holding Firms (3.20 percent), Property (2.47 percent), Industrial (2.32 percent), Services (1.99 percent), and Financials (0.73 percent) lagged behind it.

There were only 815.83 million shares traded, or PHP6.79 billion, in the thin volume.

At 156 to 49, decliners outnumbered advancers while 39 shares remained the same.

According to Luis Limlingan, head of sales at Regina Capital Development Corporation (RCDC), “Philippine equities resumed plunging on increasing rates and global recession fears, with other regional indexes falling deeper into the bear market.”

According to Limlingan, the S&P 500 fell by 0.21 percent to 3,647.29 and the Dow Jones Industrial Average fell by 0.43 percent to 29,134.99.

The Nasdaq Composite, according to him, rose 0.25 percent to 10,829.50.

According to Limlingan, the increase in oil prices was caused by supply restraints in the US Gulf of Mexico ahead of Hurricane Ian and a weaker dollar.

West Texas Intermediate (WTI) crude oil prices rose by 2.33 percent to USD78.50 per barrel, while Brent crude oil prices rose by 2.6 percent to USD86.27 per barrel.

Even though the local currency touched 59.02 versus the US dollar in mid-trade, it ended the day at 58.98, up from its all-time low of 58.99 on Tuesday.

It started the day at 58.95, which was lower than the previous session’s opening price of 58.8.

It fluctuated in price between 58.88 and 59.02, averaging 58.99.

Volume increased from USD1.062 billion to USD1.197 billion in one day.

In response to inquiries from the Philippine News Agency, Michael Ricafort, chief economist at Rizal Commercial Banking Corporation (RCBC), stated that the local currency had corrected “after Malacanang said President (Ferdinand) Marcos (Jr.) is closely monitoring the peso exchange rate on a regular basis and (is) coordinating with the economic team amid (the) pesos) impact on inflation.”

According to Ricafort, the local currency has lost PHP7.98, or 15.6%, in value against the US dollar since the year began, down from 50.999 at the end of 2021.

According to him, “(this) could result in higher import prices and overall inflation, increasing the likelihood of further local policy rate hikes, possibly even an unexpected/off-cycle local policy rate hike to help stabilize the peso as well as overall inflation.”

Local monetary officials “suggested possible surprise/off-cycle local policy rate hike/s, increased intervention in the local foreign currency markets, both of which might help stabilize the peso exchange rate as well as overall inflation,” according to Ricafort.

He expects the peso to fluctuate on Thursday between 58.85 and 59.05 to the US dollar.

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