Philippine stocks rebound as rate hike pressure eases

Philippine shares rebounded on Tuesday, with the main index back above the 6,300 line, as expectations of a less hawkish stance from the central bank lifted sentiment despite lingering uncertainties.

The Philippine Stock Exchange index (PSEi) went up by 0.6% or 37.68 points to close at 6,326.89, while the broader all shares index rose 0.5% or 17.15 points to end at 3,437.92.

“The local bourse ended higher as sentiment improved following the Bangko Sentral ng Pilipinas’ (BSP) remarks that weaker economic growth could reduce the need for further rate hikes. The softer second quarter gross domestic product (GDP) growth … eased concerns over additional monetary tightening,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “Investors responded positively, supporting selected gains across the market.”

“The local market rose on the back of hopes that the BSP would temper its policy tightening given the country’s latest GDP print. Other figures reflect investors’ cautiousness, however, amid lingering uncertainties from the US-Iran situation to the Philippines’ economic outlook,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco likewise said in a Viber message.

BSP Governor Eli M. Remolona, Jr. on Monday said they could still hike “as much as necessary” to ensure inflation continues to soften and eventually return near their 3% goal.

According to Mr. Remolona, both a third straight hike and a pause are on the table for now. However, when asked if the second-quarter growth print has eased the pressure to hike further, he said: “Yes.”

In the second quarter, Philippine economic growth slumped to a new post-pandemic low of 2.3%, slower than 2.8% in the first quarter and 5.4% a year ago.

Most sectoral indices closed higher on Tuesday. Mining and oil rose by 2.18% or 398.27 points to 18,671.68; property increased by 1.84% or 35.33 points to 1,950.39; financials went up by 1.52% or 28.79 points to 1,924.29; and industrials advanced by 0.13% or 10.33 points to 8,102.56.

Meanwhile, holding firms declined by 0.12% or 5.41 points to 4,502.78, and services edged down by 0.01% or 0.24 point to 3,467.27.

Advancers beat decliners, 98 to 91, while 64 names were unchanged.

“Jollibee Foods Corp. was the day’s index leader, jumping 5.05% to P156. Semirara Mining and Power Corp. was the main index laggard, plunging 6.14% to PHP 18.04,” Mr. Tantiangco said.

Value turnover went up to PHP 5.13 billion on Tuesday with 881.01 million shares traded from the PHP 4.096 billion with 621.75 million issues that changed hands on Monday.

Net foreign buying was at PHP 179.33 million, a reversal of the PHP 217.28 million in net selling in the previous session. — A.G.C. Magno