Shares slipped on Friday after the peso depreciated and the government’s report of a record-high P12-trillion national debt.

The benchmark Philippine Stock Exchange index (PSEi) fell by 46.08 points or 0.62% to close at 7,342.01, while the broader all shares declined by 22.90 points or 0.58% to close at 3,895.52.

“The PSEi [was] lower today after the peso exchange rate weakened versus the US dollar to the weakest in more than two years or since October 9, 2019,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

On Friday, the Philippine peso closed at P51.74, weaker than Thursday’s P51.50 per dollar.

“The PSEi [was] also lower today after outstanding national government debt posted new record highs, but offset by lower-than-expected inflation data,” Mr. Ricafort added.

The Bureau of the Treasury reported that the National Government’s total outstanding debt stood at P12.03 trillion as of end-January. For January, total debt increased by 2.6% to P301.12 billion due to domestic and external debt.

“Philippine inflation came out this morning better than expected for February at 3.0% and was able to tame some of the selling,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

On Friday, the Philippine Statistics Authority reported that headline inflation stayed at 3% in February, recording the same annual growth rate as in January. Inflation in February 2021 was posted at 4.2%.

“Higher prices of major global commodities as Russia’s war with Ukraine continues despite the second round of talks and upcoming third round of talks, thereby could aggravate the disruptions in the global supply chains and could lead to higher inflation, slow down economic recovery prospects, narrow profit margins, and valuations, amid increased sanctions on Russia that could reduce global trade, transactions, and payments,” Mr. Ricafort said.

Mr. Limlingan said investors would continue to monitor the Russia-Ukraine crisis, despite declining volatility in energy and bond markets.

Majority of sectoral indices ended in the red on Friday, except for mining and oil, which gained by 53.63 points or 0.40% to 13,327.07, and property, which rose by 3.91 points or 0.11% to 3,498.54.

Meanwhile, holding firms slid by 89.68 points or 1.25% to 7,060.32, industrials went down by 104.97 points or 1.03% to 10,076.44, services contracted by 9.76 points or 0.49% to 1,958.73, and financials retreated by 2.97 points or 0.17% to 1,688.71.

Value turnover decreased to P5.22 billion or 1.33 billion shares changing hands from P8.26 billion or 1.82 billion shares on Thursday.

Decliners outnumbered advancers, 102 versus 89, while 44 names closed unchanged.

Foreigners turned net sellers on Friday with P164.23 million from P489.15 million in net buying seen the previous trading day.

Mr. Ricafort placed major support at 7,100 to 7,200 to “help preserve the underlying upward trend over the past two to three months.” — Luisa Maria Jacinta C. Jocson