THE peso strengthened on Wednesday, but remained at the P58 to the dollar level, and concerns over its direction continued to weigh on the stock market.
The benchmark Philippine Stock Exchange index fell for a second day, shedding 26.44 points, or 0.4 percent, to 6,607.22. The broader All Shares index also dropped, by 0.33 percent, or 11.82 points, to 3,523.95.
The peso, which fell to an 18-month low on Tuesday, strengthened by 21 centavos to P58.06 against the dollar.
It opened trading at P58.15:$1 and ranged from P58.06 to P58.235. Volume reached P1.292 billion, lower than the P1.620 billion recorded in the previous session.
Rizal Commercial Banking Corp. chief economist Michael Ricafort attributed the gain to the Bangko Sentral ng Pilipinas (BSP) having said that it could intervene in the foreign exchange market to mitigate excessive volatility.
The last time that the peso breached the P58 level was on Nov. 8, 2022, when it closed at 58.275 against the greenback. It had fallen to a record low of P59 against the dollar a month earlier following aggressive rate hikes by the US Federal Reserve (Fed).
BSP Governor Eli Remolona Jr. has downplayed the decline, saying the peso had moved in tandem with other regional currencies. Analysts, however, have said that his statements last week that the BSP could start cutting rates ahead of the Fed had factored in the peso's plunge.
Claire Alviar, research associate at Philstocks Financial Inc., said the weakening of the Philippine currency could have adverse effects on the economy, including the "upward pressure it may exert on inflation if this trend persists."
Regina Capital Development Corp. Managing Director Luis Limlingan, meanwhile, said investors had stayed on the sidelines while awaiting the minutes from the Fed's April 30-May 1 meeting.
Market participation was weak, resulting in a thin value turnover of P4.76 billion.
Sector indices had mixed results: services had the biggest gain of 0.9 percent while property dropped the most by 1.39 percent.
Decliners outnumbered advancers, 111 to 82, while 50 were unchanged.
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