PSE index jumps to 6,200 level on rate cut hopes

Philippine stocks rose on Wednesday, pushing the main index back to the 6,200 level, on hopes of more interest rate cuts here and in the United States.

The bellwether Philippine Stock Exchange index (PSEi) jumped by 1% or 61.92 points to close at 6,210.66, while the broader all shares index rose by 0.6% or 22.41 points to end at 3,728.61.

“The local market extended its rise as hopes of another BSP (Bangko Sentral ng Pilipinas) rate cut lifted sentiment,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said. “The decline in local yields and the strengthening of the peso also gave the market a boost.”

“The market was already positioning ahead of the US Federal Reserve’s decision, with sentiment also shaped by Finance Secretary Recto’s recent remarks suggesting the BSP may cut rates if the Fed does. With inflation still within the target range, a Fed cut could be a key trigger for the BSP to ease further later this year,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said.

Finance Secretary and Monetary Board member Ralph G. Recto said on Tuesday that the Philippine central bank may deliver one more rate cut before yearend, depending on the data and how markets react to the Fed’s policy statements overnight.

The BSP last month lowered borrowing costs by 25 basis points (bps) for a third straight meeting to bring the policy rate to 5%. It has now cut benchmark interest rates by a cumulative 150 bps since it began its easing cycle in August 2024.

Meanwhile, the Fed was widely expected to cut its benchmark interest rate by a quarter of a percentage point to the 4%-4.25% range at the end of its two-day monetary policy meeting overnight, Reuters reported.

The main focus beyond the rate decision will be on Fed Chair Jerome H. Powell’s comments on the outlook for US monetary policy.

Money markets expect the Fed to lower policy rates by nearly 70 bps by the end of 2026, according to LSEG data.

All sectoral indices closed in the green on Wednesday. Services went up by 1.9% or 42.01 points to 2,248.70; mining and oil climbed by 1.47% or 173.5 points to 11,977.50; financials rose by 1.02% or 21.30 points to 2,101.72; holding firms increased by 0.87% or 44.12 points to 5,072.14; property added 0.25% or 6.39 points to end at 2,468.97; and industrials moved up by 0.15% or 14.37 points to 9,043.38.

Advancers beat decliners, 104 to 83, while 59 names were unchanged.

“International Container Terminal Services, Inc. was the top index gainer, climbing 3.26% to PHP 507. DigiPlus Interactive Corp. was the main index laggard, falling 4.1% to PHP 22.20,” Mr. Tantiangco said.

Value turnover surged to PHP 10.02 billion on Wednesday with 7.48 billion shares traded from the PHP 6.56 billion with 3.69 billion stocks that changed hands on Tuesday.

Net foreign buying was at PHP 693.91 million, a turnaround from the PHP 35.46 million in net selling recorded the day prior. — Alexandria Grace C. Magno