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The Philippine peso firmed up on Thursday as official data confirmed an improved second-quarter gross domestic product (GDP) performance, even as the stock market closed slightly lower amid cautious investor sentiment.
The Philippine Statistics Authority reported that the economy grew 5.5 percent from April to June, a slight improvement from the 5.4 percent posted in the first quarter. The figure kept the country on track with the lower end of the government's 5.5 to 6.5 percent full-year target.
In response, the peso appreciated to 56.97 against the US dollar, strengthening from the previous day’s close of 57.47. Intraday trading ranged from 56.97 to 57.35, with an average of 57.19, buoyed by strong volume amounting to USD2.71 billion.
Currency traders welcomed the faster pace of economic expansion, viewing it as a sign of macroeconomic stability and improving fundamentals.
“Momentum is slowly building. A sustained improvement in output could anchor the peso in the short term, especially with moderating inflation and stable remittances,” one analyst noted.
Despite the positive economic indicator, the Philippine Stock Exchange index (PSEi) slipped by 0.09 percent to 6,364.69. The broader All Shares index also dipped 0.10 percent to 3,776.06.
Sectoral performance was mixed. The Services and Financials counters gained 2.05 percent and 0.62 percent, respectively, lifted by earnings optimism and retail demand. However, Industrials dropped 1.53 percent, followed by declines in Holding Firms, Property, and Mining and Oil.
Regina Capital Development Corp. head of sales Luis Limlingan said the modest GDP improvement tempered market reactions. “Some investors might have expected stronger results given earlier signals from agriculture and services,” he said.
He added that sentiment was also shaped by second-quarter earnings results, global market cues, and expectations over monetary policy adjustments.
While stocks moved cautiously, observers said the positive economic print and firm peso provide room for potential market upside in the coming weeks.
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