Philippine shares retreat, weighed by economic concerns

Philippine shares retreated on Wednesday as sentiment turned cautious in anticipation of the policy decisions of the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) and lingering concerns over the domestic economy.

The Philippine Stock Exchange index (PSEi) went down by 0.27% or 16.70 points to end at 5,959.94, while broader all shares index decreased by 0.1% or 3.51 points to 3,462.70.

“Philippine stocks drifted lower as investors stayed on the sidelines ahead of policy rate announcements from the US Fed and the BSP, as well as pricing the disappointing 5% unemployment rate in October,” AP Securities, Inc. said in a market note.

The Fed was set to announce its policy decision at the end of its two-day meeting overnight. A second straight 25-basis-point (bp) cut is largely priced in, but markets will monitor the statement of Fed Chair Jerome H. Powell for clues on the central bank’s future policy path.

Meanwhile, a BusinessWorld poll showed that 17 of 18 analysts expect the BSP to deliver a fifth straight 25-bp reduction at its own meeting on Thursday to bring the policy rate to 4.5%, the lowest since September 2022.

“The local market pulled back as investors dealt with the World Bank and ADB’s (Asian Development Bank) downgrade of their Philippine economic growth projections, the decline in September foreign investments, the rise in October unem-ployment, and the weakness of the peso,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

The World Bank and the ADB this week lowered their respective Philippine gross domestic product forecasts as they expect governance concerns to drag economic growth below target.

The corruption scandal has also hit investor confidence, with net inflows of foreign direct investments plunging to an over five-year low of USD 320 million in September from USD 432 million a year ago.

Meanwhile, the peso on Tuesday sank to a new record low of PHP 59.22, mostly due to a strong dollar in anticipation of the Fed’s decision. On Wednesday, it inched up by a centavo.

Sectoral indices ended mixed on Wednesday. Mining and oil rose by 1.22% or 169.29 points to 13,986.43; property increased by 0.2% or 4.64 points to 2,242.90; and industrials went up by 0.13% or 11.33 points to 8,474.99. Meanwhile, holding firms declined by 0.54% or 25.31 points to 4,656.04; services shed 0.37% or 9.26 points to end at 2,487.43; and financials went down by 0.32% or 6.31 points to 1,920.22.

“Metropolitan Bank & Trust Co. was the day’s top index gainer, climbing 2.8% to PHP 66. Converge ICT Solutions, Inc. was the worst index performer, dropping 3.23% to PHP 14.36,” Mr. Tantiangco said.

Decliners outnumbered advancers, 100 to 93, while 63 names closed unchanged.

Value turnover went down to PHP 6.75 billion on Wednesday with 657.57 million shares traded from the PHP 10.55 billion with 1.19 billion issues that changed hands on Tuesday.

Net foreign selling decreased to PHP 787.08 million from PHP 2.63 billion. — A.G.C. Magno