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The credit crunch is worldwide. It looks like the Philippine Peso has been affected by the whole credit crunch we see here in the US! The Philippine Peso is now at record lows for the past 22 months at almost 50 Peso to 1 US dollar. But this is hardly a relief for me as a mongerer as im looking at my stocks and 401k which are also at record losses. :(
Quote from FT.com:
By Roel Landingin in Manila
Philippine share prices suffered their largest daily fall in 21 years after the country’s biggest bank reported an unexpected third-quarter loss, reinforcing worries about the local impact of the global financial meltdown.
The Philippine peso also fell to its lowest level in 22 months at 49.35 pesos to the US dollar.
The Philippine Stock Exchange index dropped 12.3 per cent to 1,713.83 – the biggest single-day fall since July 24 1987.
Trading was suspended for 15 minutes after the index dropped by 10 per cent in mid-morning trade. Stocks continued to slide after trading resumed.
Banco de Oro Unibank, the country’s biggest lender by assets, plunged by almost a quarter to 22.50 pesos a share after it reported a loss of 1.3bn pesos ($26.3m) in the third quarter on provisioning for investments in Lehman Brothers Holdings , the bankrupt US bank.
The quarterly loss pulled January-September profit down to 1.05bn pesos from 4.88bn pesos in the same period last year
Analysts said investors were surprised by Banco de Oro’s third-quarter loss because the bank, like other local lenders, had previously disclosed negligible amounts of exposure in Lehman Brothers and other troubled international banks.
“It got many investors thinking about how uncertain things really are, about what else is out there that could prove to be a risk,” said Edgar Bancod, research chief at ATR Kim Eng Securities, a regional brokerage.
Francis Varela, president of AB Capital and Investment, an investment bank, said last week’s sharp falls in prices of US dollar-denominated Philippine sovereign bonds had added to investor unease about Philippine banks.
More than half of the outstanding Republic of the Philippine bonds (ROPs) are believed to be held by local institutions, mainly commercial banks.
“From a profit and loss point of view, the ROPs are very risky when prices are very volatile,” Mr Varela said. “In a mark-to-market environment, the volatility could hit the banks’ profits or their capital.”
The Philippine central bank last week approved new rules that gave banks until November 1 to shift the classification of assets from categories that require mark-to-market accounting into categories that do not, allowing them to avoid booking losses from falling asset prices.
Other banks also fell, with the financial services index losing a 10th of its value on Monday.
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