MANILA – Both the peso and the Philippine Stock Exchange index (PSEi) ended higher Tuesday, partly due to better remittances figures and the continued re-opening of the economy.
The local currency finished the day at 48.4 from 48.51 a day ago.
It opened the day at 48.48, better than its 48.56 start in the previous session.
It traded between 48.48 and 48.4, resulting in an average of 48.428.
Volume totaled to USD884.3 million, higher than the USD212.6 million Monday.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the local currency ended the day to its strongest in nearly four years or since November 3, 2020, when it closed at 48.34 to a greenback.
Ricafort attributed this to the increase in the remittance inflows, which rose for the second consecutive month last July, and the improvement in foreign direct investments (FDI).
Data released by the Bangko Sentral ng Pilipinas (BSP) showed that cash inflows from overseas Filipino workers (OFWs) rose by 7.8 percent year-on-year to USD2.78 billion.
However, the year-to-date growth of cash remittances is still in contraction with a -2.4 percent print to USD16.8 billion.
Monetary authorities have projected a 5-percent contraction in remittance inflows this 2020 because of the pandemic, with OFWs losing their jobs.
A 4-percent economic recovery is, however, projected for OFW remittances in 2021.
Similarly, the central bank reported on Tuesday the 7.1-percent year-on-year increase in FDIs last June to USD481 million as the domestic economy continues to reopen.
Year-on-date inflows are still in contraction with a -18.3 percent decline to USD3 billion. This is, however, better than the 21.9-percent contraction in the first five months of the year.
Ricafort forecasts the peso to trade between 48.00-48.25 level against the US dollar on Wednesday.
Meanwhile, the main stocks gauge rose by 0.35 percent, or 21.07 points, to 6,018.21 points.
All Shares barely rose after a jump of 0.03 percent, or 0.89 points, to 3,591.57 points.
Most of the sectoral gauges also finished with gains, led by Holding Firms, which rose by 0.99 percent.
Financials increased by 0.60 percent, Mining and Oil by 0.43 percent, and Property by 0.27 percent.
Services contracted by 1.49 percent and Industrial by 0.11 percent.
Volume totaled to 829.03 million shares amounting to PHP5.55 billion.
Losers led gainers at 113 to 78, while 51 shares were unchanged.
Ricafort traced the optimism in the local bourse to continued re-opening of the domestic economy through the “transportation and tourism, as this could improve economic recovery prospects and investment valuations.”
“Signing of the PHP165.5-billion Bayanihan 2 Law and the Economic Team prioritizing reform measures such as the CREATE (Corporate Recovery and Tax Incentives for Enterprises), FIST (Financial Institutions’ Strategic Transfer), and GUIDE (Government Financial Institutions’ Unified Initiatives to Distressed Enterprises for Economic Recovery) Bills have also helped improve market sentiment recently,” he said.
He forecast the main index to trade between 6.100-6,150 levels Wednesday “which serves as gateway vs. further upside potential in the near future.” (PNA)