PSEi soars to 6,400 level on BSP rate cut hopes

The main index soared to the 6,400 level on Monday to hit a near six-month high amid growing hopes for another rate cut from the Bangko Sentral ng Pilipinas (BSP) next month.

The Philippine Stock Exchange index (PSEi) surged by 1.13% or 71.82 points to end at 6,419.96, while the broader all shares index increased by 0.94% or 34.13 points to 3,641.13.

This was the PSEi’s best finish in nearly six months or since it closed at 6,444.16 on July 24.

“Philippine equities have officially risen back to index levels seen prior to the flood control fiasco, driven by the dovish tone sung by the BSP chief, hinting at a high chance of a 25-basis-point (bp) cut this upcoming February meeting,” AP Securities, Inc. said in a market note.

Last week, BSP Governor Eli M. Remolona, Jr. said a cut remains on the table at the Monetary Board’s Feb. 19 meeting, even as he noted that the policy rate is already “very close” to where they want it to be, signaling an imminent end to their easing cycle.

The Monetary Board has lowered benchmark borrowing costs by a total of 200 bps since its rate cut cycle began in August 2024. In 2025 alone, it delivered a cumulative 125 bps in cuts for five straight meetings to bring the key rate to an over three-year low of 4.5%.

“The PSEi ended in the green, supported by sustained buying momentum throughout the session. Market sentiment further improved following Nomura’s forecast that the BSP could possibly deliver 25-bp rate cuts in both February and April,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Expectations of a more accommodative policy stance further encouraged risk-taking among investors,” he said.

Nomura Global Markets Research said in a Jan. 9 report that the BSP may ease its policy stance further this year as the corruption scandal may continue to dampen government spending and economic growth.

Nomura Chief ASEAN (Association of Southeast Asian Nations) Economist Euben Paracuelles and Macroeconomic Research Analyst Yiru Chen said the BSP could deliver one 25-bp cut each at its February and April meetings.

All sectoral indices closed higher on Monday. Mining and oil surged by 5% or 815.87 points to 17,116.43; financials increased by 2.13% or 45.62 points to 2,179.17; property went up by 1.87% or 43.28 points to 2,347.21; industrials climbed by 0.81% or 73.53 points to 9,139.77; holding firms jumped by 0.7% or 34.99 points to 5,026.91; and services increased by 0.33% or 8.53 points to 2,563.17.

Advancers outnumbered decliners, 142 to 80, while 53 names closed unchanged.

Value turnover went up to PHP 6.64 billion on Monday with 1.02 billion shares traded from the PHP 6.11 billion with 1.57 billion issues that changed hands on Friday.

Net foreign buying increased to PHP 534.17 million from PHP 320.68 million. — Alexandria Grace C. Magno