MANILA, July 15: The Philippine peso opened lower on Tuesday but most traders stayed away after last week's de facto devaluation, and investors on the share market could not make up their minds which way to go.

The local currency, one of several southeast Asian currencies to be hammered by speculators in the past few weeks, opened at 30 pesos per dollar, down from 29 on Monday. It is now almost 14 percent down from its level at the end of last week, before the central bank surrendered to speculators and allowed the peso to float more freely.

"There are many (dollar) bids, but few offers in the market," one dealer said.

The central bank, which sold dollars at 29 pesos on Monday, had not given any bid or offer quotes. The direction of the country's stock market was unclear as investors sifted out currency-sensitive issues and looked for those likely to benefit from a weak peso, such as exporters.

The Philippine Stock Exchange main index opened a shadehigher but within the first hour fell a sharp 2.22 percent to 2,650.61 points.

Last Friday, when the central bank announced it was letting the peso move in a wider range, the stock market surged to the second biggest daily rise in its history. The surge stemmed from hopes the central bank would lower interest rates, which are now at 2 1/2-year highs.

But with the foreign exchange market continuing to remain volatile, the central bank has left rates alone.

"The sentiment is a little heavy. Everybody seems to be expecting that interest rates will improve or that the peso will stabilise but nothing's happening. There are even more scares about the local economy, oil prices and the like," said David de la Cruz, Amsteel Securities vice-president for marketing.

Investors were now selling the stocks that catapulted higher on Friday's euphoria, brokers said.

"While the market is waiting for things to stabilise, there's profit-taking and it's mostly in blue chips," said Joey Roxas, president at Eagle Equities Inc.

On Tuesday, the central bank kept its overnight borrowing and lending rates unchanged at 32 percent and 34 percent, respectively.

But it raised its one-month reverse repo rate to 25 percent from 12.375 percent.

Brokers said the hopes of a rate cut may have also dwindled as some local newspapers quoted central bank governor Gabriel Singson as saying monetary authorities were prepared to raise interest rates even further.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.