PSEi slides 2.2% on Fed, BSP tightening view

Philippine shares slumped by over 2% on Thursday on concerns that elevated global oil prices could push up inflation and lead to further monetary tightening, which may dampen economic growth.

The Philippine Stock Exchange index (PSEi) went down by 2.2% or 126.30 points to close at 5,610.39, while the broader all shares index fell by 1.45% or 46.44 points to 3,145.55.

This was the PSEi’s worst finish in almost 11 months since it ended at 5,584.35 on Nov. 14, 2025.

The PSEi opened the session at 5,727.76, slightly below Wednesday’s 5,736.69 close. It reached an intraday high of 5,744.40 but was unable to hold on to its gains, finishing at the session’s low.

“The local market closed lower as expectations of rate hikes by both the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) mount up. In the Fed’s latest minutes of the meeting, officials signaled another possible rate hike by yearend. Meanwhile, the Philippines’ latest inflation print of 7.2% points to a possible further monetary tightening here at home,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“The local index ended lower as selling pressure intensified amid rising crude oil prices, with oil nearing $104 per barrel. Moreover, sentiment weakened as traffic through the Strait of Hormuz fell to a two-month low, raising concerns over potential supply disruptions. Investors remained cautious as elevated oil prices could further weigh on inflation and economic growth,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Minutes from the US Federal Reserve signaled policymakers viewed inflation as the biggest risk to their outlook, Reuters reported. Fed policymakers voted unanimously to raise interest rates by a quarter of a percentage point at the US central bank’s Sept. 15-16 meeting. The minutes from that meeting released on Wednesday indicated that policy might need to be tightened further.

Meanwhile, analysts said the 7.2% September Philippine inflation print, which was the fastest in three-and-a-half years, supports the case for a fourth straight rate hike by the BSP, especially amid forecasts of a strong El Niño event until next year that could also push up consumer prices.

All sectoral indices closed in the red on Thursday. Services slid by 4.86% or 151.46 points to 2,962.54; mining and oil sank by 3.43% or 665.30 points to 18,746.94; financials dropped by 1.43% or 25.28 points to 1,745.90; property fell by 1.02% or 18.02 points to 1,743.69; industrial retreated by 0.09% or 6.49 points to 7,265.07; and holding firms slipped by 0.06% or 2.34 points to 4,180.46.

Decliners beat advancers, 112 to 73, while 67 names closed unchanged.

Value turnover jumped to PHP 21.14 billion on Thursday with 2.002 billion shares traded from the PHP 4.94 billion with 513.23 million issues that changed hands on Wednesday.

Net foreign selling was at PHP 1.18 billion, a reversal of the PHP 175.56 million in foreign buying recorded in the previous session. — Alexandria Grace C. Magno