Peso continues to weaken, closes at 64.17 vs dollar

MANILA, October 28 ------ The peso hit a fresh record low of P64.17 against the dollar at the end of trading yesterday. The local currency opened at 63.95 versus the US dollar and already hit 64 as of 11:05 a.m., according to the website of the Bankers Association of the Philippines. It even depreciated to 64.20 during intraday trading. The peso's previous record low was P63.95 on Monday.

Will Cabangon, president of stock brokerage firm AAA Securities, said a weaker peso may benefit companies that are strong dollar earners. “When you convert those dollars into pesos, the weaker the peso gets, the more earnings that they have,” Cabangon said in an interview with ANC.

Cabangon pointed out that the weakening peso acts as a tailwind for US dollar earners, making them attractive options for investors because their earnings increase when converted back into pesos. He explained that the persistent weakness of the currency, combined with rising interest rates and inflation, is currently creating a difficult environment for the market, suggesting that conditions may worsen before they improve. He also said that stock market investors should be on the lookout for bargains in the market. “I think some of these really high quality companies are basically being given away for free right now,” he said. “I still really like the utilities. They've taken quite the beating because utilities are very sensitive to interest rates, but interest rates don't rise forever. It gets to a point where the central bank will stop hiking. I think that's sooner than later, because as you've seen, GDP figures kind of slowed down quite a bit.” “I think we're getting to the pain points now, where the BSP will consider slowing down interest rate hikes. So once that stops, I expect the utilities to bounce back with a vengeance,” he said.

Prior to the US and Israel attack on Iran at the end of February, the peso was on a winning streak, clawing back to P57.665 on February 27, which was the last trading day for the month. Since the outbreak of the US war with Iran, the peso has lost P6.505 to the greenback or 11.3 percent.

Source: news.abs-cbn.com