Nathanne Raffaille “Naith” Acosta and Bryan Arthur Senen belong to Gen Z. They’re cousins, they attend the same school in college, the one with the green color, and they’re enthusiastic to exercise their right to vote for the first time.
Both are politically and social media savvy, Naith, in particular. Vice president of BLAZE 2024, a student org in La Salle, Naith is rooting for the pink team. In her latest FB post, she implores voters to “join us to color our future pink.”
Mang Dudoy, on the other hand, is kept informed not only through social media as he subscribes to YouTube and Tiktok, but likewise by reading the newspaper. Everyday, he buys Tempo, and listens to the radio.
Three more nights, and then, it will be “The Day” that each and every one of us is waiting for. Like Naith and Bryan, Mang Dudoy is eager to go to the polling center this Monday.
While excitement rules their heart, the market on the other hand is feeling jittery. As in every election, the market, almost always, is on the edge. The current situation feels like a déjà vu of six years ago.
In 2016, the financial system experienced a tailspin with the peso declining to P47 levels while the bourse index hovered a little above 7,000 mark. As I write this Wednesday to comply with my deadline, the local stocks continue to slide with investors remaining cautious, taking the sidelines.
The prevailing sentiment is risk aversion, most awaiting for the outcome of the presidential race and in anticipation of the US rate hike. Largely due to the spiralling prices of oil products, the US inflation rate soared to 8.5 percent, the highest in 41 years. To smash the ugly head of inflation, the Federal Reserves increased its rate by 50 basis points, the biggest jump in 22 years.
The same cost-push situation, sustained rising oil prices, prevails in the Philippines with the annual inflation jumping to 4.9 in April as domestic oil pump prices swing like a pendulum but more often on the high side with the drop a trickle.
Though talks circulating in the hallways of the Bangko Sentral ng Pilipinas indicate the authorities, despite the uphill climb in inflation, are considering hike in the overnight rate by June yet. Aren’t they behind the curve already?
Rate hike, if so decided, will be positive for the peso, which as of Wednesday has already breached the psychological level of P52.50 to the green, the lowest in nearly three years. Following the break of the psychological barrier, the peso is predicted to still weaken and could fly to the P53 level and beyond.
The peso volatility is caused by the reduction of offshore investors’ PH equity exposure, resulting in the Philippine Stock Exchange closing at 6,802.73. Though a slight improvement fueled by some bargain hunting, from the previous day’s close, comparatively, the index is lower from 7,159.29 mark at this time, running up to the election day six years ago.
Ain’t behaving market is nothing out of the extraordinary during the election period.
This does not mean investors are leaving. They are just watching on the sidelines, but at a certain point take advantage of lower priced blue chips.
Eventually, the market will settle down. As Bankers Association of the Philippines President Antonio Moncupa reminds us market watchers of the fundamental truth that “nobody knows where the US dollar-peso is headed,” including the bourse.
The moment when we will elect the country’s next president is just around the corner. First time voters, Naith and Bryan, Mang Dudoy, you and me must be discriminating in our choice. No room for any egregious slip-up because it will shape our future for the next six years.
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