PSEi continues slump after hawkish BSP remarks

Philippine shares slumped for a third straight session on Thursday after the central bank governor said it was too early to cut interest rates, hurting investor sentiment.

The 30-member Philippine Stock Exchange Index (PSEi) fell by 0.59% or 41.20 points to close at 6,837.34. The broader all-share index dropped by 0.54% or 19.70 points to 3,567.89.

The index dropped as rate cut hopes were tempered by Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr.’s remarks that there was no assurance yet that inflation would settle within their 2-4% target, Philstocks Financial, Inc. trader Mikhail Philippe Q. Plopenio said in a Viber message.

“Additionally, investors digested the statement from US Federal Reserve Chairman Jerome Powell overnight that the Fed is not yet ready to cut rates,” he added.

Philippine inflation quickened to 3.4% in February from 2.8% a month earlier due to higher food and transport costs.

The BSP has kept the benchmark rate steady at a near 17-year high of 6.5%. It raised borrowing costs by 450 basis points from May 2022 to October 2023 to tame inflation.

“Philippine shares continued to be sold down as investors digested Mr. Powell’s testimony before the US House financial services committee,” Luis A. Limlingan, sales head at Regina Capital Development Corp., said in a Viber message. “Later, Wall Street awaits the release of the latest jobless claims data, and trade balance and consumer credit data for January.”

Global oil prices rose on Wednesday as Mr. Powell indicated that interest rates would likely come down this year, though the central bank is moving cautiously, he added.

Almost all of the PSEi’s sectoral indices fell, led by property which declined by 2.4% or 68.96 points to 2,793.83. Financials shed 0.89% or 17.90 points to 1,988.49, while mining and oil dipped by 0.48% or 41.33 points to 8,475.34. Holding companies fell by 0.16% or 10.90 points to 6,523.16, while industrials shed 0.09% or 8.38 points to 9,068.64.

Services added 0.8% or 14.19 points to 1,778.13.

Among the index members, International Container Terminal Services, Inc. was at the top, climbing by 2.74% to PHP 300. Metropolitan Bank & Trust Co. lost the most, dropping by 4.78% to P59.70.

Value turnover rose PHP 4.99 billion with 652.03 million shares switching hands, compared with 503.78 million stocks worth PHP 4.85 billion on Wednesday.

Decliners beat advancers 109 to 64, while 44 stocks were unchanged. Net foreign buying dropped to PHP 4.65 million from PHP 50.33 million a day earlier. — Revin Mikhael D. Ochave