PESO WEAKENS ANEW; SC HEARINGS ON POE CASE STARTS TODAY
MANILA, February 19, 2004 (STAR) By Des Ferriols - The peso weakened anew yesterday as the market braced itself against the outcome of today’s Supreme Court (SC) hearing on petitions to disqualify opposition presidential candidate Fernando Poe Jr. (FPJ) over his citizenship status.
Analysts said investors fear that a possible disqualification of FPJ, currently the front runner for the May 10 election, could spark violent protests by his supporters.
At the Philippine Dealing System (PDS), the peso hit an intra-day low of 56.130 to the dollar but managed to gain some ground in late trade to close at 56.125 to $1. Yesterday’s close, however, was 10.50 centavos lower than Tuesday’s close of 56.020 to the dollar.
Value turnover amounted to $138.50 million on an average rate of 56.064 to $1.
The SC is scheduled to hear oral arguments today over FPJ’s citizenship and traders said the market was preparing for the possibility that the former action star would be disqualified from the presidential race.
According to one trader, the build-up towards the May elections was hurting sentiments not only in the domestic market but among foreign investors who expect Poe’s supporters to take to the streets should the SC decide to disqualify him.
"It’s the CNN syndrome," said one trader. "People see video clips of people in the streets looking agitated, they think there’s a revolution going on."
The Bangko Sentral ng Pilipinas (BSP) admitted that concerns over political uncertainties continue to cloud sentiments coupled with legitimate demand for dollars in the market.
BSP Deputy Governor Amando Tetangco Jr. said the BSP noted a demand for dollars among manufacturers, automobile assemblers and banks which were covering their short positions.
"Of course, political concerns were still there," Tetangco said.
Despite efforts by the BSP to prop up the peso against the dollar, market jitters have negated the impact of the monetary tools that were used precisely to shield the peso from excessive speculations.
The peso’s lowest close so far was at 56.20 recorded two weeks ago while the historic intraday low was at 56.22 to the dollar.
Earlier, the BSP said the Monetary Board was ready to consider further "active policy measures" to avoid the inflationary implications of a sharp and sustained depreciation of the peso.
Reported by: Sol Jose Vanzi
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