PSEi sinks to over 5-year low on slowdown fears

The main index plunged to an over five-year low on Monday as disappointing third-quarter gross domestic product (GDP) growth and weak foreign direct investments (FDI) data sparked fears of an economic slowdown.

The benchmark Philippine Stock Exchange index (PSEi) sank by 0.98% or 56.73 points to close at 5,702.64, while the broader all shares index decreased by 0.45% or 16.14 points to end at 3,498.43.

This marked the PSEi’s worst finish in nearly five-and-a-half years or since it closed at 5,570.22 on May 28, 2020.

“The Philippine market ended lower despite cheaper valuations following the release of the GDP figures. Investors remain cautious about entering the market as concerns over macroeconomic conditions persist,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Philippine equities bucked the regional upswing in markets following a report showing that FDI plunged by 40.5% in August and by 22.5% on a year-to-date basis, providing yet another data point supporting the case for slower economic growth for the remainder of the year,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.

Philippine GDP growth slowed to an over four-year low of 4% in the third quarter from 5.5% in the prior quarter and 5.2% in the same period last year, the government reported on Friday.

This was well below market expectations of an above-5% clip as corruption allegations surrounding state infrastructure projects affected government spending and consumer sentiment.

The third-quarter GDP print brought the nine-month average to 5%, well below the government’s 5.5-6.5% full-year growth target. Officials said meeting this goal could be very challenging, even as they remained optimistic about a rebound in government and private spending this quarter.

Meanwhile, net FDI inflows slumped by 40.5% year on year to USD 494 million in August from USD 830 million in the same month in 2024, the central bank reported on Monday. For the first eight months, net inflows dropped by 22.5% to USD 5.179 billion.

Mr. Limlingan added that companies’ financial results also contributed to the mixed market sentiment.

Most sectoral indices closed lower. Services declined by 1.36% or 31.35 points to 2,265.97; financials dropped by 1.34% or 25.77 points to 1,897.92; property fell by 0.77% or 16.11 points to 2,061.35; holding firms went down by 0.48% or 22.21 points to 4,586.95; and industrials decreased by 0.31% or 26.54 points to 8,371.29.

Meanwhile, mining and oil surged by 7.18% or 912.01 points to 13,603.39.

Decliners outnumbered advancers, 100 to 85, while 56 names were unchanged.

Value turnover went down to PHP 6.96 billion with 1.86 billion shares traded from the PHP 14.17 billion with 1.71 billion issues that changed hands on Friday.

Net foreign buying slumped to PHP 122.02 million from PHP 4.98 billion. — A.G.C. Magno