The peso yesterday closed at 44.53 to the US dollar, down from Friday's close of 44.455. The total value of transactions at the Philippine Dealing System reached $716 million, off from Friday's historic high of $1.166 billion.

The peso traded from 44.30 to 44.53.

Lower oil prices helped to lift the peso, which rose 0.3 percent to a high of 44.30 per dollar. Additionally, the currency was still riding the bullish sentiment generated by a 50-basis-point rise in interest rates last Thursday.

"The peso remains stronger, and was definitely helped by the rate hike last week, plus oil prices are dropping," a trader in Manila said.

The central bank's hefty rate rise and its hawkish stance will bolster the peso in the short term, but more tightening may hurt the economy and undermine the currency in the longer run, analysts said.

Meanwhile the Philippine Stock Exchange index (PSEi) closed 1.13 percent higher, up 27.10 points to 2,416.62. Trading reached P1.45 billion. "The market is partly oversold, so it was somewhat a technical rebound. Also there was some breather from the US market," said Accord Capital Equities, Inc. analyst Claire Quiray.

Quiray noted that recent financial reports in the US markets had left its index close quite higher on its recent sessions. Crude oil prices meanwhile continued to decline.

"Overall however, investing sentiments remain cautious as can be seen on successive foreign selling," said Quiray. Most actively traded Globe Telecoms, Inc. was up P20 to P1, 035.Ayala Land, Inc. was up P 0.10 to P8.60.

Philippine Long Distance Telephone Co. was up P10 to P2, 415. Megaworld Corp. was up P0.02 to P1.18. Metrobank Corp. was up P1.50 to P32.

Ayala Corp. was up P10 to P267.50.

Most Asian currencies firmed on Monday off the back of oil's recent slide, but investors were cautious ahead of US regional bank results this week that will provide another gauge on the health of the financial sector.

Benchmark US crude hovered around $130 per barrel on Monday after dropping more than $14 in the past seven days, which helped push both the Philippine peso and the Thai baht to one-month highs.

Despite this, the yuan and South Korean won extended their losses from the previous week.