The Philippine Peso tumbled to a record low yesterday closing at PHP 56.99 against the USD. The Peso has depreciated by 11.77% year-to-date (YTD) from PHP 50.99 at the beginning of the year and this has created a negative feedback loop on the economy as the country\u2019s trade deficit surged to an all-time of US$ 5.8 billion in June. The deficit could further widen as imports remain elevated while exports decline due to weak demand from China ( ~15.5% of our total exports were to China for 2021).<\/p>\n\n\n\n
While some have argued that the USD is to blame for the weakening Philippine currency, the Philippine Peso (-11.77%) and the Thai Baht (-10.07%) are the weakest ASEAN currencies YTD.<\/p>\n\n\n\n
Our View:<\/strong> Focus on stocks that earn in U.S denominated currency. Forward pricing on the Philippine Peso shows that the currency is expected to depreciate further to PHP 58 per USD by the end of 2022.<\/p>\n\n\n\n This should allow us to stay anchored to companies that are benefitting from the weak Philippine Peso. A few in mind are commodity exporters like SCC, NIKL and APX. While commodity prices are now way off their 2022 peaks, the weaker Philippine currency has tempered that decline.<\/p>\n","protected":false},"excerpt":{"rendered":" Here’s a commentary on an important issue or event affecting the stock market <\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-317102","post","type-post","status-publish","format-standard","hentry","category-special-reports","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/317102","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=317102"}],"version-history":[{"count":3,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/317102\/revisions"}],"predecessor-version":[{"id":320494,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/317102\/revisions\/320494"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=317102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=317102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=317102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}