Philippine Forex Trading Still On Pause; Stock Market Drops

Forex trading in the Philippines remained restricted on Thursday despite the stock market's reopening. The halt was caused by extreme weather conditions, including torrential rains and floods, which put Metro Manila at a standstill.

In a post on Facebook, the Bangko Sentral ng Pilipinas (BSP) stated that trading between the US dollar and the Philippine peso, as well as other monetary activities, would be suspended for the day. The BSP also stopped currency-related transactions and PhilPaSSplus activities, which had been allowed on Wednesday.

To meet the requirements of financial institutions during the suspension, the BSP indicated that “Banks can tap the Cash Service Alliance for their currency needs.” The central bank guaranteed the public that all services will reopen on Friday.

During these disturbances, the stock market fell dramatically. The Philippine Stock Exchange index (PSEi) decreased by 82.85 points, or 1.23 per cent, to 6,670.27. The wider All Shares index also fell, losing 31.67 points (0.87 per cent) to 3,606.81.

According to Mikhail Plopenio, research and engagement officer at Philstocks Financial Inc., the drop was prompted by an overnight sell-off on Wall Street. He elaborated: “The dismal second-quarter corporate results from the tech sector contributed to the market's downturn.”

Plopenio further said that the economic effect of Super Typhoon Carina heightened investor anxieties, further dragging on the stock market. Furthermore, recent government statistics indicating a budget deficit of P209.10 billion impacted market sentiment.

Regina Capital Development Corp.'s Managing Director, Luis Limlingan, agreed, noting that “Philippine shares followed the sentiment of regional equities.” He added that Wall Street fell significantly on Wednesday due to a tech-driven sell-off, which followed dismal quarterly reporting from key tech firms such as Alphabet and Tesla.