Stocks retreat as market eyes Nov. inflation data

Phlippine stocks dropped anew on Monday as players cashed in their gains before the release of November inflation data on Friday that could bolster expectations of another rate cut by the Bangko Sentral ng Pilipinas (BSP) next week.

The bellwether Philippine Stock Exchange index (PSEi) fell by 0.54% or 32.95 points to close at 5,989.29, while the broader all shares index decreased by 0.68% or 24.56 points to end at 3,543.78.

“The local bourse closed in red as investors locked in profits ahead of the release of key economic data on Friday. This decline came despite expectations of softer November inflation, supported by continued rice price deflation, which may give the BSP additional room to consider another rate cut,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

A BusinessWorld poll of 15 analysts yielded a median estimate of 1.6% for the consumer price index, within the BSP’s 1.1-1.9% month-ahead estimate.

If realized, this would ease from the 1.7% clip in October and the 2.5% logged in the same month a year ago. This would also be the slowest since the 1.5% print in August and would mark the ninth straight month that inflation fell below the central bank’s 2-4% annual target.

BSP Governor Eli M. Remolona, Jr. last month said they could deliver a fifth straight 25-basis-point (bp) cut at the Monetary Board’s Dec. 11 policy meeting to help support the economy amid weakening growth prospects. The central bank has reduced borrowing costs by 175 bps since it began its easing cycle in August 2024, with the policy rate now at 4.75%.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message that the PSEi corrected slightly amid “healthy profit taking” following its recent rebound.

Weak manufacturing activity data released on Monday also affected market sentiment, he said. The Philippines’ Manufacturing Purchasing Managers’ Index (PMI) slumped to 47.4 in November, a reversal of the 50.1 in October, according to S&P Global. It said this was the “strongest deterioration in operating conditions across the Filipino manufacturing sector since August 2021.”

Most sectoral indices declined on Monday. Holding firms slumped by 1.87% or 91.25 points to 4,764.73; property decreased by 0.74% or 16.47 points to 2,202; financials went down by 0.28% or 5.7 points to 1,998.80; and industrials slipped by 0.02% or 1.92 points to 8,623.71.

Meanwhile, mining and oil surged by 2.47% or 338.81 points to 14,053.82, and services went up by 0.58% or 13.89 points to 2,389.20.

Advancers narrowly beat decliners, 99 to 97, while 65 names were unchanged.

Value turnover went up to PHP 6.48 billion on Monday with 1.14 billion shares traded from the PHP 5.52 billion with 1.53 billion issues exchanged on Friday.

Net foreign selling surged to PHP 1.87 billion from PHP 781.70 million on Friday. — Alexandria Grace C. Magno