MANILA - The peso extended losses on Tuesday, falling to a fresh seven-year low against the dollar while share prices opened lower.

The local unit weakened to P48.405 to the dollar, its lowest level since September 14, 2009 in early trading from Monday's close of P48.250. The Philippine Stock Exchange Index traded 0.79 percent lower to 7,572.33 points.

Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said late Monday the peso' decline reflected "uncertainty" over the next policy move of the US Federal Reserve.

Budget Secretary Benjamin Diokno told DZMM Tuesday there was "no cause for alarm" over the peso's weakness as this would boost the spending power of families who rely on remittances from overseas Filipinos.

The peso weakened on Monday in heavy trading as importers' dollar demand added to downward pressure stemming from stock outflows.

International investors were net sellers for the 23rd straight trading day on Monday.

The US Federal Reserve left interest rates unchanged last week but strongly signaled it could still tighten monetary policy by the end of the year if the labor market keeps improving. -- with reports from Reuters