Shares slide as GDP data fuel economic worries

Philippines shares ended lower on Monday as weaker-than-expected gross domestic product (GDP) data for the third quarter raised concerns over the outlook for the economy, with inflation expected to stay elevated due to lingering price pressures.

The Philippine Stock Exchange index (PSEi) dropped by 1.46% or 84.03 points to close at 5,677.92, while the broader all shares index decreased by 1.08% or 34.79 points to 3,183.52.

The bellwether index opened higher at 5,771.58 on Monday, reaching an intraday peak of 5,785.13. However, it was unable to hold on to its gains as it closed at its low for the session.

“The PSEi closed lower as investors reacted to the weaker-than-expected GDP print, raising concerns over the country’s economic growth prospects,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Sentiment remained fragile amid potential El Niño risks and persistent inflationary pressures, which could further weigh on domestic demand and economic activity,” he said. “The combination of growth concerns and macroeconomic headwinds prompted investors to maintain a cautious stance and limit exposure to local equities.”

Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco likewise said that the local bourse plunged as investors digested the GDP data.

“In line with this, worries over the local economy’s outlook following the latest GDP print together with the high inflation trend and possibility of another BSP (Bangko Sentral ng Pilipinas) rate hike also weighed on the market,” he said in a market note.

Philippine GDP expanded by 2.1% year on year in the July-to-September period, slowing from 4% in the same period last year and the revised 2.4% growth in the second quarter, the government reported on Monday. This was below the median GDP estimate of 2.7% in a BusinessWorld poll.

This brought the nine-month average to 2.5%, lower than the government’s 3.5%-4.5% full-year target.

In October, Philippine headline inflation hit a near four-year high of 7.8%, marking the eighth straight month that it was above the BSP’s 3% target. This pushed the year-to-date average to 5.6%.

Five of the six sectoral indices closed lower. Property declined by 2.07% or 37.59 points to 1,777.01; holding firms retreated by 1.94% or 84.47 points to 4,278.01; industrial decreased by 1.74% or 129.64 points to 7,300.14; services went down by 0.88% or 25.43 points to 2,869.10; and financials sank by 0.84% or 15.61 points to 1,842.68.

Meanwhile, mining and oil jumped by 2.34% or 436.79 points to 19,064.72.

Decliners outnumbered advancers, 100 to 74, while 69 names were unchanged.

Value turnover fell to PHP 5.98 billion on Monday with 822.34 million shares traded from the PHP 6.36 billion with 815.40 million issues that changed hands on Friday.

Net foreign selling was at PHP 233.95 million, a reversal of the PHP 981.81 million in net buying recorded on Friday. — S.J. Talavera