|
THE peso
fell Tuesday—the biggest fluctuation of any currency—on
concern a court decision due Wednesday relating to
former President Joseph Estrada will lead to protests
and delay economic reform.
Shares
also declined as jittery investors kept to the sidelines
ahead of the decision. The 30-company Philippine Stock
Exchange Index slid 13.11 points, or 0.4 percent, to
3,267.97, extending the previous day’s fall of 1.6
percent.
“People
are now playing safe, taking a conservative move to just
stay on the sidelines,” said Summit Securities president
Harry Liu.
The
currency slid to near a four-month low before the
decision to convict or acquit Estrada, who was ousted in
2001 and charged with accepting money relating to
illegal gambling. Estrada’s followers in May 2001
stormed the presidential palace, and as many as 100,000
supporters are expected to join a rally Wednesday, ABS-CBN
News reported an opposition leader as saying.
“Funds
are staying away while the Estrada verdict hasn’t been
handed out,” said Rafael Algarra, treasurer at Security
Bank Corp. “The Estrada decision is causing short-term
uncertainty.”
The peso
fell 0.9 percent to P47.115 against the dollar as of the
4 p.m. end of trading, according to Tullett Prebon Plc,
the world’s second-largest interdealer broker. The
currency had the biggest one-day drop since August 17
and closed at the lowest since May 15.
The
decision on Estrada is due to be announced today at 9
a.m.
Investors worry a guilty verdict in Estrada’s
six-year-old plunder trial Wednesday may trigger
protests by his supporters, while an acquittal could
raise questions over President Arroyo’s rise to power in
2001 after Estrada was ousted.
“An
acquittal is a blow to the administration’s ability to
prosecute, while a conviction without a pardon may cause
some destabilization,” said Fitz Aclan, who helps manage
the equivalent of $3.7 billion at the trust division of
BDO Unibank.
The peso
plunged 3.5 percent on January 17, 2001, three days
before Estrada was ousted by a popular revolt that
installed Mrs. Arroyo.
Government bonds rose yesterday, pushing yields to the
lowest in two months, as some investors bet Estrada will
be convicted and pardoned, said Malou Liwag, vice
president for global distribution at Rizal Commercial
Banking Corp.
“There’s
some demand on speculation that the court will convict
and then pardon the former president,” Liwag said.
The
yield on the benchmark five-year bond fell 5 basis
points to 7.10 percent as of the 11:15 a.m. fixing at
Philippine Dealing & Exchange Corp. The price of the 11
3/8 percent note due August 2012 rose 0.2354, or P24 per
P10,000 face amount, to 117.5398. A basis point is 0.01
percentage point. Yields fell to their lowest since July
3. (Bloomberg, AP) |
