MANILA (2nd UPDATE) - The Philippine peso hit a seven-year low in heavy trading Monday as importers' dollar demand added to downward pressure stemming from stock outflows.

The peso lost 0.6 percent to 48.26 per dollar, its weakest since September 2009.

The peso's slump to a seven-year low reflects investor caution ahead of the next policy move by the US Federal Reserve, and was in line with movements in other currencies, the central bank governor said on Monday.

"The peso movement reflected continuing uncertainty about the US Fed's next policy action, just like the other regional currencies, plus strong FX demand for fixing and corporate requirements," Bangko Sentral ng Pilipinas Governor Amando Tetangco said in a text message.

Local importers scrambled for the greenback for payments, which further weakened a currency already impacted by sustained equity outflows.

Foreign investors were net sellers in Manila stocks over the past six weeks. Analysts say President Rodrigo Duterte has been seen as alienating allies of the Philippines such as the United States with his crackdown on drugs.

The peso's slide "picked up momentum after the break of 48," said a senior Philippine bank currency trader in Manila who expects the currency to weaken to 48.50.

The Philippine unit may see a minor chart support at 48.35, but it is likely to seen heading to around 49.00, analysts said.

The peso is seen to further weaken to P48.50 to the dollar in the coming weeks due to "political concerns," said Matthew Cipriano, a forex trader at Union Bank.

“The foreign investor confidence right now is very uncertain, and we first saw this with the outflows and equity markets,” he said.

Philippine Stock Exchange index was down nearly 1 percent to 7,648.69 in noon trading Monday.

The weakness in Philippine financial markets comes on the heels of a sixth straight week of fund outflows from the Philippine Stock Exchange and 22 straight days of selling.

The discussion on why the funds are leaving has centered around two things: the Federal Reserve and its plans to raise interest rates and President Rodrigo Duterte's colorful commentary, which S&P said has somewhat "diminished confidence" the consistency of Philippines policies, from economic and fiscal to security and diplomacy.

Marvin Fausto, president of IFE Financial Advisors, said he also wants to see more consistency from government.

"The analysts in S&P are actually saying the inconsistencies of policies or probably some international policies that the current administration is kind of trying to clarify for an investor, those uncertainties are very clear, and those uncertainties will keep them on the sidelines," he said.

The foreign fund outflow has helped depreciate the peso against the US dollar as offshore investors sell peso and peso-denominated assets to reinvest elsewhere.

If the peso continues to weaken, it might lead to more outflows, Fausto said.

-- With reports from Reuters