MANILA – The Philippine peso managed to stay firm against the US dollar Monday but the main equities index fell more than six percent due to concerns on the rise of coronavirus disease 2019 (Covid-19) cases in the country.
The local currency ended the week’s first trading day at 50.58 from 50.64 last Friday, which BPI Research pointed to the drop in global oil prices.
Reports said global oil prices plunged by around 30 percent after Saudi Arabia slashed prices Monday as Russia declined to cut production over the weekend.
With these, the peso opened the day at 50.63, sideways from its 50.65 start in the previous session.
It traded between 50.715 and 50.54, resulting in an average of 50.626.
Volume totaled to USD771 million, way lower than the USD1.4 billion last Friday.
The peso is seen to trade between 50.40 and 50.70 on Tuesday.
On the other hand, the Philippine Stock Exchange index (PSEi) shed 6.76 percent, or 457.77 points, to 6,312.61 points.
All other indices also ended in the red, with the All Shares dropping by 5.55 percent, or 224.33 points, to 3,815.22 points.
Financials posted the highest drop among the sectors after it fell 8.56 percent, and was trailed by the Services, 6.70 percent; Industrial, 6.36 percent; Holding Firms, 6.20 percent; Mining and Oil, 6.07 percent; and Property, 5.91 percent.
Volume totaled to 1.15 billion shares amounting to PHP6.3 billion.
Losers led gainers at 204 to 30, while 23 shares were unchanged.
BDO chief strategist Jonathan Ravelas told the Philippine News Agency that risk aversion may be addressed if the government would be able to assure the public it is “on top of the situation” despite the rise of Covid-19 cases which increased to 20 according to news reports as of 6 p.m. Monday.
He said the epidemic has affected the tourism sector, among others, and the government needs to address qualms regarding job losses to alleviate investors’ worries on the economy.
Ravelas said further drop of the PSEi has many factors.
On the external front, investors want to be assured of the recovery of the Chinese economy since this will have ripple effects on the global economy.
On the domestic side, government efforts against the virus to prevent further rise of cases need to be stepped up, he said.
Ravelas suggested that President Rodrigo R. Duterte augment anti-Covid-19 measures budget with his own office’s funds to fast-track actions towards addressing the health concern.
Aside from the fiscal measures, he said the Bangko Sentral ng Pilipinas (BSP) has repeatedly assured its readiness to help in the situation thus, the projection for another 25-basis-point reduction during the policy-making Monetary Board’s (MB) second rate-setting meet on March 19.
Ravelas said government measures to counter Covid-19’s effect must be two-pronged, adding “the faster they decide what to do, the better.”
“As long as we are able to show that we are combating it (the health situation), investors should not worry,” he said. (PNA)