MANILA – Assurance that passage of the proposed 2021 national budget will not be hampered by the House of Representatives’ session suspension partly resulted to the sideways close of the peso and the rise of the Philippines’ main stocks index Thursday.
The local currency finished the day’s trade at 48.355 from 48.39 close a day ago.
It opened the day at 48.43 and traded between 48.43 and 48.35, resulting to an average of 48.37.
Volume reached USD519.35 million, lower than the previous day’s USD584.4 million.
“(The) peso (is) also stronger after Malacañang gave an assurance that suspension of the sessions at the House of Representatives will not delay the passage of the PHP4.5 trillion 2021 national budget, which President Duterte wants to pass on time, also pointing out that the Senate has enough time to finish the deliberations,” Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said.
Another plus for the local currency is indication by US President Donald Trump about his “willingness to sign individual stimulus measures instead (of the ones proposed by US lawmakers),” he said.
Other factors that supported market sentiments are reports that Trump has already tested negative for Covid-19, the World Health Organization’s (WHO) hint that a Covid-19 vaccine may be available by end-2020, and the possibility of a Biden win in the US national polls, which, Ricafort said, may reduce uncertainties.
Ricafort forecasts the currency pair to trade between 48.00-48.25 range on Friday.
Relatively, the Philippine Stock Exchange index (PSEi) rose 1.27 percent, or 74.78 points, to 5,942.66 points.
All Shares also increased with a jump of 1.01 percent, or 35.75 points, to 3,563.65 points.
All the sectoral indices also ended the day with gains, led by the Mining and Oil, which hiked by 3.38 percent.
It was trailed by the Holding Firms, 1.56 percent; Industrial, 1.52 percent; Property, 1.29 percent; Services, 0.76 percent; and Financials, 0.22 percent.
Volume totaled to 2.26 billion shares amounting to PHP19.6 billion.
“Local shares rallied after President Donald Trump, signaled he was open to a number of measures (Airline Payroll Support), only hours after calling off talks with congressional Democrats on a relief package until the November election,” Luis Limlingan, Regina Capital Development Corporation head of sale, said.
He also noted the minutes of the Federal Open Market Committee meeting last month wherein monetary officials remain optimistic for a tentative economic recovery but also noted the need for additional fiscal support. (PNA)
