PSEi climbs as BSP signals possible rate cut

Philippine stocks rose on Wednesday, bolstered by bargain-hunting and optimism that the Bangko Sentral ng Pilipinas (BSP) could cut policy rates in December, a move investors hope will support growth amid slowing domestic demand.

The Philippine Stock Exchange index (PSEi) added 0.99% or 57.05 points to close at 5,813.71, while the broader all-share index gained 0.62% or 20.29 points to 3,251.84.

“The local bourse ended higher, still driven by bargain-hunting,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message. “Moreover, investor sentiment improved after the BSP signaled the possibility of another rate cut by the end of the year. This expectation continued to support buying activity in today’s session.”

BSP Governor Eli M. Remolona, Jr. on Tuesday said a reduction at the Monetary Board’s Dec. 11 meeting is possible, likely in a modest 25-basis-point (bp) step.

The central bank has lowered borrowing costs by 175 bps since August 2024, bringing the benchmark rate to 4.75%, its lowest in over three years.

Cuts have been prompted by slowing economic growth, subdued inflation and weaker investor confidence following the flood control corruption scandal that dented business sentiment and domestic consumption.

“The market continued its slow climb, now at its short-term resistance as investors supported local equities, while waiting for Nvidia Corp. earnings, which could offer a glimpse of US equities’ future,” AP Securities, Inc. said in a market note.

US stocks fell, with major indexes dipping below a key technical level for the first time since April, amid caution ahead of retail and semiconductor earnings and a delayed job report.

Back home, most domestic sectoral indexes advanced. Financials rose 1.77% to 1,932.09; industrials jumped 1.55% to 8,517.88; holding firms gained 1.13% to 4,534.39; property added 0.43% to 2,118.71; and services edged up 0.07% to 2,362.88. Mining and oil fell 0.47% to 12,765.5.

Market breadth was positive with 112 advancers versus 61 decliners, while 67 stocks were unchanged.

Value turnover dipped slightly to PHP 6.23 billion on 886.24 million shares, down from PHP 6.67 billion on 1.15 billion shares on Tuesday. Net foreign selling eased to PHP 915.4 million from PHP 1.31 billion.

The PSEi’s modest rebound reflects growing investor optimism that further monetary easing could lower borrowing costs, support domestic consumption and stabilize business sentiment, even as uncertainties linger over global markets and domestic corruption issues continue to weigh on confidence. — Alexandria Grace C. Magno