Stocks inch lower on US credit rating downgrade

Philippine shares slipped on Monday as investors monitor the potential impact of Moody’s move to downgrade the United States’ credit rating.

The bellwether Philippine Stock Exchange index (PSEi) inched down by 0.16% or 10.69 points to close at 6,454.84, while the broader all shares index dropped by 0.09% or 3.71 points to 3,765.66.

“The PSEi ended the trading session slightly lower, reflecting the local market’s tepid reaction to Moody’s credit rating downgrade of the US,” Juan Paolo E. Colet, managing director at China Bank Capital Corp., said in a Viber message. “While the downgrade itself was not a surprise, investors are waiting to see whether the move triggers a more adverse movement in US Treasury yields that could potentially unsettle equity markets.”

“Philippine shares tracked global indices lower as investors evaluate credit risks after Moody’s downgraded the US’ credit rating,” Alfred Benjamin R. Garcia, research head at AP Securities, Inc., likewise said.

Moody’s Ratings on Friday cut the US’ long-term issuer and senior unsecured ratings to “Aa1” from “Aaa” and changed the outlook to “stable” from “negative.”

Moody’s said in a statement that the downgrade in US’ rating “reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.”

Treasury yields rose and US stock futures slipped with the dollar on Monday due to concerns about US debt and rising deficits after Moody’s downgraded its US sovereign credit rating late on Friday, Reuters reported.

The US 10-year yield rose 7 basis points to 4.51%. The 30-year yield rose above 5% for the first time since April 9, the day US President Donald J. Trump paused most of his so-called reciprocal tariffs for 90 days.

“Philippine shares kicked off the week on a muted note, as the local market continued to digest corporate earnings and monitor potential political shifts post-election,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., added in a Viber message.

Sectoral indices were split on Monday. Property dropped by 1.69% or 39.27 points to 2,272.26; industrials went down by 0.99% or 91.59 points to 9,080.64; and financials declined 0.88% or 21.30 points to 2,397.99.

Meanwhile, mining and oil increased by 1.15% or 104.65 points to 9,184.73; services climbed by 1.14% or 24.45 points to 2,155.34; and holdings firms rose by 1.1% or 59.57 points to 5,475.56.

Value turnover dropped to PHP 6.19 billion on Monday with 755.08 million shares traded from the PHP 6.59 billion with 730.87 million issues exchanged on Friday.

Decliners outnumbered advancers, 109 versus 86, while 49 names were unchanged.

Net foreign selling dropped to PHP 223.77 million on Monday from PHP 406.52 million on Friday. — Sheldeen Joy Talavera with Reuters

PSE hikes capital-raising goal to PHP 170B

The Philippine Stock Exchange Inc. is increasing its capital raising target this year to PHP 170 billion from PHP 120 billion and from PHP 82.4 billion in actual capital raised last year, amid an easing trade war between the world’s two biggest economies that had fed fears of a global recession.

The new goal is based on capital-raising activities that have been applied for and does not yet take into account GCash’s planned initial public offering (IPO), PSE President and Chief Executive Officer Ramon S. Monzon told a virtual news briefing last week.

“We expect this year to be a very high capital-raising year, a very successful year for PSE,” he added.

Mr. Monzon said capital raised at the PSE had reached PHP 42.42 billion as of May 14.

Some of the big IPOs expected include those from west zone water concessionaire Maynilad Water Services, Inc. and mobile wallet operator GCash.

“I’m really looking at IPOs, follow-on offerings, stock rights offerings and private placements because after all, the exchange is the platform where companies are supposed to raise capital,” the PSE chief said.

Mr. Monzon hinted that GCash might end up proceeding with its IPO later this year but said it had not yet applied.

“GCash has been talking to us,” he said. “While there has been no formal application yet, I know they are preparing to do an IPO later this year.”

“As to the actual timing, we don’t know when it will be. There are some issues that they are trying to resolve, mainly the valuation and determining what size of IPO they should have that can be absorbed by the market,” he added.

Globe Telecom, Inc., which has a 36% stake in Globe Fintech Innovations, Inc. (Mynt), which owns GCash operator G-Xchange, Inc., last month said its IPO for the e-wallet would proceed, but the timing remained uncertain due to market volatility caused by US tariffs.

The US and China last week announced a 90-day pause on most of their recent tariffs on each other, fueling hopes of a cooldown in their trade war.

The combined US duties on Chinese imports will be cut to 30% from 145%, while China’s levies on US imports will fall to 10% from 125%.

But some analysts have noted that tariffs remain far higher than before Mr. Trump regained office, suggesting that prices of many consumer goods — from cars and food to clothing — would still go up.

Maynilad is targeting a July 17 listing for its PHP 45.8-billion IPO, based on its latest prospectus dated May 14. It is required to offer at least 30% of its outstanding capital stock to the public by January 2027 under its legislative franchise.

Jarrod Leighton M. Tin, an equity research analyst at DragonFi Securities, Inc., thinks the PSE’s capital-raising target this year is attainable.

“It is achievable since Maynilad is required by law to list on the PSE,” he said in a Viber message. “The stock right offerings and follow-on offerings should be straightforward.”

“Now is a better time to conduct IPOs since the US markets have bottomed out with the de-escalation of the trade war,” he added.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., also cited better stock market conditions locally and in the US.

“It follows that more fund-raising is possible locally, as companies that will sell shares will be able to sell at a higher price and maximize the proceeds that they would be able to raise,” he said in a Viber message.

PDS Interst

Meanwhile, Mr. Monzon said the PSE is seeking to increase its stake in the Philippine Dealing System Holdings Corp. (PDS) to as much as 97% as the market operator awaits developments on three government banks that are selling their interest.

“We’re talking to three government institutions that still own shares in PDS,” he said, referring to Development Bank of the Philippines with 3%, Land Bank of the Philippines with more than 2.5% and Philippine Deposit Insurance Corp. with less than 1%.

“It’s taking a long time for us to acquire this because being government banks, they’re subject to certain rules before they can dispose of their investments,” the PSE chief said. “Right now, they’re trying to get an exemption to go into another public bidding before they can sell to PSE.”

Last week, the PSE increased its beneficial ownership stake in PDS to 91.6% after it closed accession deals for the 17,500 PDS shares held by two members of the Bankers Association of the Philippines (BAP) equivalent to a 0.28% stake.

The PDS operates the Philippine Dealing and Exchange Corp. (PDEx), Philippine Depository and Trust Corp. and Philippine Securities Settlement Corp.

After the market operator’s acquisition of PDS, Mr. Monzon said the PSE had agreed to sell part of its ownership in bond trading platform PDEx to BAP.

“After some serious negotiations, we finally reached an agreement that PSE would be willing to sell part of the PDEx ownership to BAP, but PSE would remain in control at 51%,” he said.

“It’s the banks that do a lot of the trading and generate the revenues for PDEx,” he pointed out. “You want to have them as a partner, not as an adversary.”

“Being the primary stakeholders of the fixed-income market, I think they would be very helpful in coming up with new products that they could trade and offer to their clients,” he added.

In December, the PSE reached a PHP 2.32-billion deal to acquire a 61.92% stake in PDS. The deal involved the acquisition of 3.87 million shares at PHP 600 each.

On Friday, the bellwether PSE index shed 0.02% or 1.33 points to 6,465.53, while the broader all-share index added 0.02% or 0.93 point to 3,769.37. – Revin Mikhael D. Ochave, Reporter

Election-tied spending may shield growth from tariffs

Household consumption during the election period and state expenditures once the ban on spending on certain infrastructure projects is lifted are expected to cushion the effects of higher US tariffs on Philippine economic growth.

“We project that the impact of US tariffs can be offset by election spending activities and lifting of the ban on certain public works after the elections,” Budget Secretary Amenah F. Pangandaman told BusinessWorld in a Viber Message last week.

Ms. Pangandaman, who heads the Development Budget Coordination Committee (DBCC), said government capital spending is likely to accelerate in the coming quarters.

The Commission on Elections’ 45-day ban on public works spending started on March 28 and ended with the May 12 elections.

The Philippine economy grew slower than expected in the first quarter at 5.4% from 5.9% a year earlier. It was below the government’s 6-8% target for the year.

The slowdown was partly attributed to heightened uncertainty from US President Donald J. Trump’s reciprocal tariffs announced in April. The higher duties, including a 17% tariff on Philippine exports, were suspended for 90 days pending negotiations.

Ms. Pangandaman expects election-related spending to lift economic growth after the 18.7% increase in state expenditures as agencies front-loaded ahead of the election ban.

Department of Economy, Planning, and Development Undersecretary Rosemarie G. Edillon said state spending could moderate in the second quarter since it was covered by the ban in April and parts of May.

Ms. Pangandaman said disbursements are expected to pick up toward the latter part of May to June after the election ban is lifted.

However, analysts warned the boost could be short-lived.

Election-related spending could only provide a “short-term” boost, said John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies.

“This may partially offset the drag from external headwinds like the US tariffs, especially if government agencies frontload infrastructure projects and political campaigns sustain high levels of economic activity,” he said in a Viber Message on Sunday.

He said the momentum from election spending might not be enough to sustain growth beyond the second quarter if export-facing sectors suffer losses or investment slows.

The benefits are “transitory,” while higher tariffs could have longer-term structural effects such as reduced export competitiveness, supply-chain shifts and investor uncertainty, he added.

Philippine export growth slowed to 6.2% in the last quarter from 8.1% a year earlier as companies remained cautious about trade.

Reinielle Matt M. Erece, an economist at Oikonomia Research and Advisory, Inc., said relying on government spending to drive growth is unsustainable and could exhaust the state budget and trigger more borrowings.

He urged the government to pursue trade deals and improve the investment climate instead.

Trade Secretary Maria Cristina A. Roque, Special Assistant to the President for Investment and Economic Affairs Frederick D. Go and Philippine Ambassador to the US Jose Manuel D. Romualdez met with US Trade Representative (USTR) Jamieson Greer in Washington on May 2 to discuss tariffs.

Ms. Roque earlier said the meeting “went very well,” adding that they expect more meetings.

Ms. Pangandaman said they would continue to monitor agencies’ budget use rates, while catch-up plans for delayed programs would be prioritized post-election. — Aubrey Rose A. Inosante

Philippine banks’ March bad loan ratio softens

Philippine banks’ bad loan ratio eased to a three-month low in March as total loans increased, according to data from the Bangko Sentral ng Pilipinas (BSP).

The industry’s gross bad loan ratio dipped to 3.3% from 3.38% in February and 3.39% a year earlier.

Bad loans inched up 0.5% to PHP 516.12 billion at end-March from a month earlier and climbed 11.1% from a year ago.

Loans are considered nonperforming once they remain unpaid for at least 90 days after the due date. They are risky assets because borrowers are unlikely to pay.

The loan portfolio of the Philippine banking system rose 3% to PHP 15.63 trillion as of end-March from a month earlier and by 14.2% from a year earlier.

Past due loans were up by 1.3% to PHP 646.37 billion as of March from a month earlier and 9.8% more than a year ago. This brought the past due loan ratio to 4.14% from 4.2% in February and 4.3% a year earlier.

Restructured loans edged up 0.1% to PHP 311.48 billion in March from February and by 5.7% year on year.

Restructured loans accounted for 1.99% of the industry’s total loans from 2.05% a month earlier and 2.15% a year ago.

Banks’ loan loss reserve hit PHP 490.56 billion in March, up 0.2% month on month and 4.9% year on year. This brought the loan loss reserve ratio to 3.14% from 3.23% at end-February and 3.42% in March 2024.

Lenders’ bad loan coverage ratio, which gauges the allowance for potential losses due to bad loans, slipped to 95.05% in March from 95.36% in February and 100.66% a year ago.

Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., attributed the lower nonperforming loan (NPL) ratio to faster bank lending growth.

“As the NPL ratio is simply dividing the NPL amount to total loan growth, faster lending growth may reduce the ratio,” he said in a Viber message.

Outstanding loans of universal and commercial banks rose 11.8% to PHP 13.19 trillion from a year ago, the central bank earlier said.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the double-digit growth in bank loans “effectively expanded the denominator, thereby mathematically reducing the NPL ratio.”

Earlier BSP data showed bank lending rose 11.8% year on year to PHP 13.19 trillion in March.

Mr. Ricafort said rate cuts by the central bank reduced financing costs and improved borrowers’ ability to pay back their loans.

“Possible further rate cuts by the BSP, especially additional rate cuts of 75 basis points (bps) for the rest of 2025 would further reduce borrowing costs,” he said. “That would help improve the payment of loans and debts, thereby helping the easing trend of banks’ NPL ratio.”

BSP Governor Eli M. Remolona, Jr. has said they are open to cutting rates by 75 bps more this year amid easing inflation.

The Monetary Board last month resumed its rate-cutting cycle with a 25-bp cut, bringing the benchmark to 5.5%. The BSP has reduced rates by 100 bps since it kicked off its easing cycle in August last year.

“It is still important to note that despite 2025 posting faster growth in lending compared with 2024, it is starting to lose momentum compared with its fastest growth in January,” Mr. Erece said.

“This is where monetary policy easing may help in boosting lending as well as economic activity,” he added. — Luisa Maria Jacinta C. Jocson

Remittance growth hits 9-month low

Money sent home by migrant Filipinos rose 2.6% in March from a year earlier, the Bangko Sentral ng Pilipinas (BSP) said on Thursday, though this was the slowest growth in nine months.

Cash remittances from overseas Filipino workers (OFW) coursed through banks hit USD 2.81 billion (PHP 156.8 billion) from USD 2.74 billion a year ago.

Remittances from land-based workers increased 3.1% to USD 2.22 billion, while money sent home by sea-based workers inched up 1% to USD 595 million.

In the first quarter, cash remittances rose 2.7% to USD 8.44 billion from a year earlier. Money sent home by land-based workers jumped by 3.2% to USD 6.74 billion, while sea-based workers’ remittances went up 1% to USD 1.7 billion.

“The growth in cash remittances from the United States, Singapore, Saudi Arabia and the United Arab Emirates (UAE) was the main driver of the overall increase in remittances for January to March,” the BSP said.

The US was the top remittance source in the first quarter, accounting for 40.7% of the total. It was followed by Singapore (7.6%), Saudi Arabia (6.2%), Japan (4.9%), the UAE (4.6%), UK (4.4%), Canada (3.1%), Qatar (2.8%), Taiwan (2.8%) and Hong Kong (2.7%).

“Cash remittances rose in March and the first quarter largely due to sustained demand for Filipino labor abroad, particularly in healthcare, engineering and domestic services,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.

He also cited seasonal factors such as the Lenten break and school-related expenses, which might have driven remittances during the quarter.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the continued single-digit growth in remittances is a “bright spot for the overall economy, as an important growth driver, especially in terms of consumer spending.”

BSP data showed personal remittances, which include inflows in kind, increased 2.6% to USD 3.13 billion in March from a year ago.

Personal remittances from workers with contracts of a year or more climbed 3% to USD 2.4 billion during the month, while those from workers with contracts of less than a year went up 1.4% to USD 660 million.

Personal remittances for the last quarter rose 2.7% to USD 9.4 billion from a year ago.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said remittances this year would likely grow 2.5% to 3% despite external headwinds. “We see remittances as resilient and still expect robust growth.”

The central bank expects cash remittances to grow 2.8% this year.

“Despite global uncertainties, remittances continue to show resilience, serving as a critical support for household consumption and a buffer for the country’s external accounts,” Mr. Rivera said.

On the other hand, Mr. Ricafort flagged the impact of US President Donald J. Trump’s tighter immigration policy on remittance flows.

“For the coming months, protectionist policies of President Trump, particularly stricter immigration rules, could weigh on some OFW remittances, especially from the US,” he added.

Mr. Trump kicked off an aggressive immigration campaign after taking office in January, declaring illegal immigration an “invasion” to boost deportations. – Luisa Maria Jacinta C. Jocson, Senior Reporter

Approved foreign investments lowest in over a year

Approved foreign investments in the Philippines slumped further by 82% in the first quarter to the lowest in one-and-a-half years, according to the local statistics agency, as US President Donald J. Trump tries to undo decades of global economic integration through his sweeping tariff increases.

Foreign investment commitments approved by the country’s investment promotion agencies plunged to PHP 27.99 billion from PHP 155.26 billion a year earlier, according to data from the Philippine Statistics Authority (PSA) posted on its website on Thursday.

This was also 51.5% lower than a quarter earlier and the lowest since the PHP 27.46 billion logged in the third quarter of 2023.

“The main reasons are the geopolitical uncertainties and trade disruptions caused by Trump’s tariffs,” Calixto V. Chikiamco, president at Manila-based Foundation for Economic Freedom, said in a Viber message.

“These factors are aggravating the already dire unfavorable climate for foreign investments, from high food inflation to lack of infrastructure and internal political divisions,” he added.

While Mr. Trump’s announcement of sweeping reciprocal tariffs on US trade partners did not come until April, he had threatened to increase duties during his campaign last year.

He later suspended these tariffs for 90 days starting April 9, imposing a 10% base tariff instead until July, pending negotiations.

South Korea was the leading source of foreign investment pledges, with commitments hitting PHP 12.36 billion or 44.2% of the total. The US followed with PHP 3.08 billion (11%) and China with PHP 2.88 billion (10.3%).

Real estate activities attracted the biggest share of foreign investments at PHP 10.79 billion (38.5%), followed by manufacturing at PHP 6.14 billion (21.9%) and administrative and support services at PHP 5.35 billion (19.1%).

The impact of lower investment pledges on Philippine economic growth would be limited, Mr. Chikiamco said, noting how the economy continues to rely on consumption and government spending rather than investment.

Economic growth in the first quarter was slower than expected at 5.4%, below the government’s 6-8% target for the year.

The Philippine Economic Zone Authority approved PHP 17.85 billion in foreign investments, accounting for 63.8% of the total. The Board of Investments (BoI) came in second with PHP 7.29 billion or 26% of the total, followed by the Bases Conversion and Development Authority with PHP 1.91 billion and the Subic Bay Metropolitan Authority with PHP 476.95 million.

Central Luzon had 53.3% of total foreign investment commitments at PHP 14.9 billion, followed by Metro Manila at PHP 6.78 billion and the Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) Region with PHP 3.95 billion.

Foreign and local investments pledged during the quarter are expected to generate 31,848 jobs once the projects are realized.

On the other hand, investment pledges from Filipino nationals fell 8.4% to PHP 153.94 billion in the first quarter, the PSA said.

Mr. Chikiamco said the local political situation could affect foreign investment pledges in the next quarters.

Investors would want to know “whether President Ferdinand R. Marcos, Jr. has enough political capital, given the results of the midterms, to push for more economic reforms in the remaining years of his term,” he added.

He said the state should liberalize foreign investment laws, expand public-private partnerships in infrastructure and reform education to boost workforce quality to counter the foreign investment decline.

It should also boost farm output to lower food prices and ease wage pressures, modernize labor rules and pursue free trade deals with the European Union, Canada and the US while seeking membership in the Japan-led Comprehensive and Progressive Free Trade Agreement for Transpacific Partnership, he added.

PSA data on foreign investment pledges differ from actual foreign direct investments tracked by the Philippine central bank, whose data go beyond projects and include reinvested earnings and lending to Philippine units through their debt instruments. – Pierce Oel A. Montalvo, Researcher

Inflation seen within target until 2027

Philippine inflation is expected to remain within the central bank’s 2-4% target until 2027, according to economists surveyed by the Bangko Sentral ng Pilipinas (BSP).

The mean inflation forecasts are expected to settle at 3.1% this year, 3.3% in 2026 and 3.4% in 2027, the survey showed, based on the minutes of the Monetary Board meeting on April 10.

“The survey respondents see upside risks from the effect of geopolitical tensions, changes in global trade policies, adverse weather conditions and upward adjustments in utility rates, transport charges and minimum wages,” the BSP said. “Downside risks are still seen from lower rice prices.”

The central bank said it expects inflation below 3% until the fourth quarter, citing the steady decline in domestic food and global oil prices.

The BSP in its April policy review slashed its inflation forecasts to 2.3% for 2025 and to 3.3% for 2026. It now expects inflation to average 3.2% in 2027.

“However, inflation is expected to rise gradually and peak in the second quarter of 2026,” it said.

As global commodity prices stabilize, inflation could ease to near 3% starting in the third quarter of 2026. “Initial baseline projections also indicate within-target inflation in 2027.”

Inflation was the slowest in more than five years in April at 1.4%, bringing the four-month average to 2%.

Risks to the inflation outlook remain broadly balanced until 2027, which would let it continue taking a “measured approach” in further policy easing.

“Monetary policy settings still appear to be relatively tight,” it said. “The timing and magnitude of further monetary easing will be determined on a meeting-by-meeting basis.”

The Monetary Board resumed its easing cycle last month with a 25-basis-point (bp) rate cut to 5.5%. It has lowered borrowing costs by 100 bps since August last year.

BSP Governor Eli M. Remolona, Jr. earlier said they are open to cutting rates by 75 bps more this year amid a favorable inflation outlook.

Meanwhile, the central bank said it expects economic growth to settle at the lower end of the government’s 6-8% target this year until 2027.

“Domestic economic activity may benefit from disinflation but faces downside risks,” it added.

The economy grew by a weaker-than-expected 5.4% in the first quarter from 5.9% a year ago.

Central bank estimates showed “slightly lower” growth forecasts for 2025 compared with its forecast in February.

“The downward revision could be attributed to the higher real policy rate, which outweighed the impact of the decline in oil prices,” the BSP said.

It also flagged challenges from the external environment that could dampen global growth “and pose a downside risk to domestic economic activity.”

“Nevertheless, recent activity indicators suggest domestic demand will be supported by low inflation, improvements in real wages and labor market conditions and the gradual easing of monetary policy settings,” it added.

Meanwhile, Economic Secretary Arsenio M. Balisacan said it is “too early” to revise the government’s 6-8% growth target for 2025-2028 despite global uncertainties and lackluster first-quarter growth.

“My sense is that it’s too early to give up 6-8% for the medium term, meaning 2025-2028,” he told reporters. “We have to be ambitious.”

“We have been left behind so far by our neighbors. If you don’t push very hard to work on a more rapid growth, you’ll always be [the last],” he added.

Lowering the upper end of the goal is possible, but Mr. Balisacan said that could affect budget assumptions.

The Development Budget Coordination Committee is expected to review macroeconomic assumptions later this month.

The Philippine economy could still growth by 6-6.5%, Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said in a Viber message.

“This is as investments and trade deficits drag on growth, as long as trade uncertainties persist,” he said. “Although trade tensions have eased relative to what it was last April, unstable trade policies can still drag investment inflows and export growth.”

“A downward adjustment on the growth targets is something that is expected given the global environment,” he added.

The best course of action for the country is “internal housekeeping” pending tariff negotiations between the Philippines and the US Trade Representative, Mr. Balisacan said, citing the country’s limited political and economic clout.

“How we all end up remains uncertain, and for so long as that uncertainty stays, the ability of investors to make these commitments and investments, whether in the Philippines or elsewhere, is muted,” he added. — Luisa Maria Jacinta C. Jocson and Aubrey Rose A. Inosante

PSEi drops to 6,400 level on profit taking

Philippine stocks dropped further on Thursday, pulling the main index back to the 6,400 level, as investors continued to pocket their gains from the market’s US-China truce-driven rally earlier this week.

The Philippine Stock Exchange index (PSEi) retreated by 1.29% or 84.95 points to close at 6,466.86, while the broader all shares index dropped by 0.8% or 30.44 points to 3,768.44.

“The local market declined further as investors continued with their profit taking while waiting for strong positive catalysts,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message. “Investors are also trading cautiously while going through the first quarter corporate results.”

“Foreigners were net sellers for the day, adding to the market’s decline,” Mr. Tantiangco said.

Net foreign selling stood at PHP 218.23 million on Thursday, a reversal of the PHP 356.25 million worth of net buying recorded on Wednesday.

Mixed earnings results of listed companies caused the market to drop on Thursday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Almost all sectoral indices closed lower. Mining and oil dropped by 3.34% or 307.68 points to 8,903.61; financials went down by 2.97% or 74.19 points to 2,421.43; property shed 2.46% or 57.4 points to end at 2,272.20; services sank by 0.4% or 8.65 points to 2,131.22; and industrials declined by 0.28% or 26.37 points to 9,164.25.

Meanwhile, holding firms rose by 0.53% or 29.38 points to 5,478.70.

Value turnover dropped to PHP 6.49 billion on Thursday with 1.54 billion shares traded from the PHP 9.5 billion with 1.56 billion issues exchanged on Wednesday.

Market breadth was negative as decliners outnumbered advancers, 108 versus 77, while 61 names were unchanged.

Mr. Ricafort said the PSEi’s immediate minor support is at 6,275-6,385 and resistance is at 6,591.94.

Global stocks fell on Thursday while the dollar stumbled as the euphoria from market tailwinds earlier in the week fizzled out, with traders looking to US data later in the day for further catalysts, Reuters reported.

Investors were greeted with a plethora of good news earlier this week from a US-China trade-war truce to a raft of headline-grabbing investment deals from the Middle East during US President Donald J. Trump’s Gulf tour, in moves that breathed new life into battered global stocks.

But most of the optimism died down by Thursday, leaving MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.15% and Wall Street futures slightly lower after notching marginal gains during the overnight cash session.

While the trade deal between the US and China gave markets some reason to cheer, the absence of clarity over Mr. Trump’s trade policies has left markets with a sense of lingering uncertainty over the global economic outlook. — R.M.D. Ochave with Reuters

Farm dep’t to lift suggested price cap for pork

The Department of Agriculture (DA) on Wednesday said it would lift the maximum suggested retail price (MSRP) for pork, demand for which spiked during the election season, within 24 hours amid low compliance among suppliers.

“It’s called one step back and two steps forward,” Agriculture Undersecretary for Livestock Constante J. Palabrica told reporters on the sidelines of an industry event on Wednesday. The agency is studying a better way to deal with high pork prices, he added.

“We are going to lift it, we’re going to study it then come up with a revised program,” he said.

The MSRP was set at PHP 300 per kilo for whole pig, PHP 350 per kilo for pork shoulder and hind leg and PHP 380 per kilo for pork belly.

But the agency had been complaining about low compliance with the MSRP since the first week of implementation, now at below 30%.

Mr. Palabrica attributed high pork retail prices to high farmgate prices that have hit as much as PHP 290 per kilo.

He said increased demand during the election season outpaced low domestic supply caused by the African Swine Fever (ASF). “It’s the law of supply and demand.”

“So, expect a possible revision of MSRP, holding it for the meantime while we are studying how to make it really effective,” he added.

For now, the agency will focus on buying hogs from pig farms at a lower price — set at PHP 230 per kilo — and distributing these to key slaughterhouses.

He was referring to a direct-sourcing strategy piloted by the Food Terminal, Inc. (FTI) with Thai firm Charoen Pokphand Foods PLC (CP Foods). The FTI is supplying a Caloocan slaughterhouse with 100 live hogs daily from CP Foods under a pilot program that started in April.

“The first thing we asked for was 100 pigs a day,” Mr. Palabrica said. “And then by next month, it will be 200. And then our target is around 500 pigs [a month].”

He added that the government is also looking into a similar strategy used by other farm companies including Pilmico Foods Corp.

“We are looking for other farms which can supply us with our own price,” he said. “If we can get a price of PHP 230, then we can supply at a lower price in the market.”

The Agriculture official said about PHP 5-7 billion is earmarked for the direct-sourcing program, which doesn’t cost the FTI because it sells the hogs at the same price, while the delivery cost to slaughterhouses is shouldered by the partner company.

“If we get it at PHP 230, you will also buy at PHP 230. Then for logistics, we have gotten a discounted price,” he added.

Mr. Palabrica said Philippine pork supply is stable. “We have enough supply of pork. But the limited number is for local pork. On imported pork, we have a lot of supply.”

Pork imports hit 53.598 million kilos in February, up from 38.994 million kilos a year earlier.

Forty-two Philippine villages had ASF cases as of March 28, up from 39 barangays as of March 14, according to data from the Bureau of Animal Industry. More than 6,200 villages have been affected by ASF cases since the first outbreak in 2019.

Mr. Palabrica said they expect the commercial rollout of a Vietnamese ASF vaccine by the end of the year.

The Agriculture department earlier said it is working with the hog industry to increase their herds by at least two million hogs each year through 2028 to return to pre-ASF levels.

Regionalization pact

Meanwhile, Mr. Palabrica said the Philippines is in talks with several countries as it implements a regionalization agreement for the imports of live chickens and their products.

Thailand, Taiwan, Paraguay and Chile are seeking to be included in the deal that seeks to do away with a countrywide ban on a trade partner dealing with bird flu outbreaks, he said.

Under the pact, the Philippines will impose a ban on poultry imports only from a specific area affected by avian influenza, allowing imports from zones or regions certified free from the animal disease.

The US, Poland, Spain, Portugal, Brazil and the Netherlands are among the countries that have been accredited by the Philippine government, Mr. Palabrica said.

The DA earlier said a countrywide ban limits the sources of day-old chicks, parent stocks and poultry meat, which leads to higher prices.

The three-phase process for inclusion in the agreement includes submission of documents on veterinary oversight, disease surveillance, traceability, control measures and zoning protocols by the exporting country.

The application will be reviewed by a risk assessment team.

A regionalization agreement will then be drafted and finalized after a successful evaluation, outlining the import terms and conditions, including revised veterinary certificates.

The agreement also mandates continuous disease reporting and biennial reviews and provides grounds for termination in cases of undeclared outbreaks.

Philippine chicken imports hit 31.7 million kilos in February from 32.426 million kilos a year earlier. – Kyle Aristophere T. Atienza, Reporter

Housing policies can’t keep up with family trends

The Philippine government should reform its housing policies as more Filipinos live with extended families — a sign that traditional family structures are shifting, according to the Philippines Institute for Development Studies (PIDS).

About 29% of Filipino households are no longer the traditional nuclear type, as more relatives resort to cohabitation to share in housing and other costs, PIDS Supervising Research Specialist Tatum P. Ramos told a recent webinar.

“They have decided to join their relatives in a household to gain support in growing their own family or [to manage] living and housing expenses,” she said, based on a PIDS statement released on Wednesday.

A PIDS paper cited the significant link between wealth and the likelihood of living in extended households.

“An extended family setup offers a resource-sharing opportunity and provides support for working young female adults who may not necessarily have the same amount of time for household management activities as before,” PIDS said.

Rising housing prices, especially in Metro Manila and in key cities, have forced households to share living spaces with relatives, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

“[There’s also the] lack of mass transport or train systems that would allow more Filipinos to live farther from central business districts to nearby provinces where housing is cheaper,” he added.

“The low attainability of housing in the Philippines is resulting in lower household formation with the rise of extended and multi-family arrangements and nonfamily housing arrangements (living alone or living with nonrelatives),” Ms. Ramos and her co-authors Marife M. Ballesteros and Jenica A. Ancheta said in the study.

“Government efforts to address this issue through a market-driven strategy should be reviewed, and housing affordability issues have to be closely examined,” they added.

Housing prices in the Philippines rose 6.7% in the fourth quarter of 2024 from a year earlier, according to the Bangko Sentral ng Pilipinas.

Mary Racelis, who teaches anthropology at the University of the Philippines, said housing policies should go beyond abstract models to address the lived experiences of the bottom 60% of the population — those who are underserved and priced out of formal housing markets.

She cited the need to understand the poor’s economic conditions to help design sustainable and inclusive housing plans.

“We should recognize that the informal settlers are not the problem, they are the solution,” she told the webinar, adding that informal settlers are not mere passive aid recipients.

Despite the wide membership of housing funds like the Home Development Mutual Fund (Pag-IBIG), the uptake of government assistance for housing finance remains limited, said Kevin Godoy, chief development specialist at the Department of Economy, Planning, and Development.

“Only 4% have government assistance as a financing source… considering that Pag-IBIG had 16 million members in 2024,” he pointed out.

He cited the importance of transport infrastructure, noting that long commutes rather than urban congestion alone are a major barrier to homeownership and household formation.

Mr. Godoy also sought the creation of a national rental housing program.

“We’re the only country in Southeast Asia that does not have a national program on public rental,” he said, noting how local governments have been left to experiment with rental solutions on their own in the absence of a national framework.

The Philippines faces a housing deficit of 6.5 million units, which could rise to 22 million by 2040 if not addressed, according to the United Nations Human Settlements Program. – Beatriz Marie D. Cruz, Reporter

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