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August 12, 2026
Chart of the Day
Net foreign direct investment (FDI) inflows dropped to USD 2.178 billion in January to May 2026, 33.4% lower than in the same period last year. The decline was mainly due to lower foreign investment in debt instruments and reinvested earnings. Despite the drop, equity capital investments remained supported by inflows from Japan, the United States, and Singapore. Source: BSP
Financial market updates
The USD/PHP exchange rate opened 24 centavos lower at 61.00 on Monday, and the volatile morning saw the pair reach highs of 61.08 and then bounce from 60.95.
The pair climbed to highs of 61.76 as banks managed fixing-related demand, although demand softened later due to successive selling from foreign banks, likely from custodian-related inflows from Tuesday’s bond issuance.
The constant selling was initially absorbed by corporate demand until demand could not keep up with the volumes sold.
The USD/PHP pair ultimately closed at 61.614, or 6.4 centavos lower day-on-day.
The current support levels for USD/PHP remain at 61.40/55, while the resistance levels are at 61.85/62.00.
Local bonds saw some lift as improving market sentiment and easing geopolitical risks pulled oil prices lower. Early activity was concentrated in the 4-Year FXTN 7-70 around 7.290%.
The Bureau of the Treasury (BTr) fully awarded the FXTN 7-68 (3Y) at an average yield of 7.217%. The 20-Year FXTN 20-27 attracted strong bids with an average yield of 7.684%, prompting the BTr to raise an additional PHP 10 billion via its tap facility.
Strong buying interest carried through the secondary market, pulling 3Y bids lower by 12 basis points (bps) to 7.120%, while 4Y yields rallied to 7.150%. Later, profit-taking pared gains, and the curve closed 1.5 to 15 bps lower across tenors.
From a relative value perspective, the desk recommends taking profit on RTB 5-18 in favor of the new 7-68, which currently offers a 34.5-bp yield advantage.
The Philippine Stock Exchange index (PSEi) closed 10.87 points lower at 6,304.03 on Tuesday, as early optimism faded and investors grew more selective ahead of a catalyst-heavy stretch.
Market breadth remained slightly negative, with 89 decliners against 78 advancers, while value turnover improved to PHP 6.32 billion.
Foreign investors remained constructive, with net buying of PHP 115.25 million, indicating selective accumulation despite a lack of clear direction.
Converge ICT Solutions Inc. (+3.47%), GT Capital Holdings, Inc. (+1.91%), Jollibee Foods Corporation (+1.87%), BDO Unibank, Inc. (+1.44%), and Globe Telecom, Inc. (+1.37%) led the gainers.
Meanwhile, Manila Electric Company (-4.66%), Semirara Mining and Power Corp. (-3.67%), PLDT Inc. (-2.00%), China Banking Corp. (-1.98%), and DMCI Holdings, Inc. (-1.85%) weighed on the index.
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