Stocks sink on selling pressure before BSP cut

Philippine stocks dropped anew on Thursday, with the main index sliding back to the 6,100 level, as investors pocketed their gains before the Bangko Sentral ng Pilipinas (BSP) delivered a widely-expected rate cut.

The Philippine Stock Exchange index (PSEi) fell by 1.32% or 83.15 points to close at 6,190.19, while the broader all shares index dropped by 0.75% or 28 points to 3,703.07.

“Investors booked gains from yesterday’s rally, taking a cautious stance while waiting for clues on the Bangko Sentral ng Pilipinas’ policy outlook from their latest meeting,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“The peso’s weak position against the dollar also weighed on the market this Thursday.”

The BSP on Thursday cut benchmark interest rates by 25 basis points (bp) to bring its policy rate to 5%, as expected by all 20 analysts in a BusinessWorld poll. This was its third straight 25-bp cut since April.

It has now lowered borrowing costs by a cumulative 150 bps since it began its easing cycle in August 2024.

BSP Governor Eli M. Remolona, Jr. said in a briefing that the key rate is now at the “sweet spot” in terms of inflation and output.

He added that they could consider further policy loosening if the economy weakens “considerably,” with one more cut still possible this year that could mark the end of its current easing cycle.

Earlier, the BSP chief signalled that more reductions could be on the table until next year.

“The market faced some selling pressure,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “But now, attention shifts to how investors will react to the BSP’s 25 bps rate cut and its implications for equity prices, especially as yields continue to decline while the inflation outlook of the central bank remains steady at 1.7% by yearend.”

Almost all sectoral indices closed lower on Thursday. Financials retreated by 2.41% or 51.21 points to 2,073.60; property went down by 1.45% or 36.30 points to 2,467.88; services sank by 1% or 22.47 points to 2,214.59; holding firms decreased by 0.67% or 34.54 points to 5,122.49; and industrials declined by 0.23% or 21.53 points to 9,111.48.

Meanwhile, mining and oil rose by 0.45% or 44.41 points to 9,864.23.

“ACEN Corp. was the day’s index leader, climbing 3.21% to PHP 2.25. BDO Unibank, Inc. was the worst index performer, dropping 3.35% to PHP 135.50,” Mr. Tantiangco said.

Value turnover dropped to PHP 7 billion on Thursday with 953.32 million shares traded from PHP 8.65 billion with 890.43 million shares exchanged on Wednesday.

Advancers and decliners were evenly split at 99 each, while 48 names were unchanged.

Net foreign selling increased to PHP 769.82 million on Thursday from PHP 41.42 million on Wednesday. — Revin Mikhael D. Ochave