Shares rise as BSP chief hints at more rate cuts

Philippine stocks extended their climb to a fourth straight day on Wednesday as the Bangko Sentral ng Pilipinas (BSP) chief hinted at more rate cuts.

The bellwether Philippine Stock Exchange index (PSEi) rose by 0.26% or 17.02 points to close at 6,370.65, while the broader all shares index climbed by 0.23% or 9.02 points to end at 3,779.96.

“The local market rallied further as investors continued to cheer the Philippines’ slow July inflation print and the possibility of further rate cuts by the BSP as a consequence,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“The PSEi closed at 6,370.65, up by 0.26%, as the investors are still weighing their positions, driven by left and right earnings sentiment. Moreover, there is growing optimism regarding the lower inflation, which could influence the BSP’s decision in its upcoming meeting,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Headline inflation eased to 0.9% in July from 1.4% in June and the 4.4% clip in the same month a year ago, the government reported on Tuesday.

This was the lowest consumer price index (CPI) in nearly six years or since the 0.6% print posted in October 2019.

For the first seven months of the year, the CPI averaged 1.7%, a tad higher than the BSP’s 1.6% full-year forecast.

The Philippine central bank has room to continue its easing cycle next year after possibly two more quarter-point cuts for the rest of 2025, according to Governor Eli M. Remolona, Jr., Bloomberg reported.

A rate cut is “more likely” this month after inflation eased to a near six-year low in July, Mr. Remolona said in an interview on Tuesday. “Something unexpected would have to happen for us not to cut rates,” he said. That will likely be followed by another reduction in the fourth quarter, the governor said.

With inflation this year likely to average below the central bank’s 2%-4% goal and within that range in 2026, it gives the BSP leeway to further lower borrowing costs “as long as the numbers look good, inflation remains low and the economy can still afford” more easing, he said.

Sectoral indices were mixed on Wednesday. Services climbed by 2.19% or 48.94 points to 2,282.28; mining and oil increased by 1.67% or 152.13 points to 9,210.57; and industrials went up by 0.85% or 77.63 points to 9,150.22.

Meanwhile, property fell by 1.16% or 28.52 points to 2,422.97; financials declined by 0.35% or 7.69 points to 2,190.73; and holding firms sank by 0.08% or 4.78 points to 5,351.49.

Value turnover went up to PHP 6.78 billion on Wednesday with 664.92 million shares traded from the PHP 5.67 billion with 1.28 billion issues traded on Tuesday.

Advancers outnumbered decliners, 93 versus 84, while 63 names were unchanged.

Net foreign buying was at PHP 211.85 million on Wednesday, a reversal of the PHP 153.3 million in net selling recorded on Tuesday. — R.M.D. Ochave