The Philippine Stock Exchange index (PSEi) was down 42.34 points to 6,807.82, a 0.62 percent drop.
The broader All Shares index was down 8.15 points or 0.23 percent to 3,566.06.
Losers edged gainers 106 to 81 with 51 stocks unchanged. Trading turnover reached P4.19 billion.
The peso closed at 56.005 to the dollar, down from 55.911 on Thursday.
The currency opened at 56.05, and hit a high of 55.98 and a low of 56.16. Trading turnover reached $947.75 million.
Emerging Asian currencies were muted on Monday, with the Lunar New Year holiday keeping volumes light while investor focus was on elections in Indonesia and the Philippines central bank’s policy decision due this week, Reuters reported.
The Bangko Sentral ng Pilipinas (BSP) is set to meet on Thursday to review interest rates.
Regional central banks have so far remained in a holding pattern with the Bank of Thailand and the Reserve Bank of India keeping key rates unchanged last week.
The BSP said last week it deems it necessary to keep monetary policy settings “sufficiently tight” until a sustained downtrend in inflation becomes evident, even as data showed that annual inflation accelerated at its slowest pace in over three years in January.
The BSP has raised its benchmark interest rate by 450 basis points since May 2022, including an off-cycle hike last October. The central bank, however, kept the rate steady at 6.5 percent in its final two policy meetings of 2023.
“BSP will probably wait for the Fed to cut first before considering an adjustment,” said Nicholas Mapa, a senior economist, ING.
“Given, however, that inflation has fallen sharply due to favorable base effects and supply side remedies, we do see the BSP cutting rates shortly after the Fed does.”
Mapa expects Philippine markets to take their cue from the region in the near term, with the peso’s upside likely to be constrained by the current account dynamics.
Luis Limlingan, managing director at Regina Capital and Development Corp., said investors took profit “as many await the latest results from the MSCI rebalancing and some key economic data in the US this week.”
Locally, investors are also waiting the BSP’s interest rate decision on Thursday.
Most actively traded Bank of the Philippine Islands was up P1.20 to P114.60. International Container Terminal Service Inc. was up P3 to P274. Ayala Corp. was up P15 to P715. SM Investments Corp. was downP15 to P900. BDO Unibank Inc. was down P2.80 to P150.80.
Metropolitan Bank and Trust Co. was down P0.10 to P59.10. SM Prime Holdings Inc. was downP0.65 to P34. Ayala Land Inc. was down P0.35 to P34.55. Universal Robina Corp. was down P1 to P110.30. Manila Electric Co. was down P7 to P360.
