PHILIPPINE STOCKS prolonged their climb to a fourth straight day on Wednesday because 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 shut at 6,370.65, while the broader all shares index climbed by 0.23% or 9.02 points to finish at 3,779.96.
“The local market rallied further as investors continued to cheer the Philippines’ slow July inflation print and the potential 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%, because the investors are still weighing their positions, driven by left and right earnings sentiment. Furthermore, there may be 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 identical month a 12 months ago, the federal government reported on Tuesday.
This was the bottom consumer price index (CPI) in nearly six years or because the 0.6% print posted in October 2019.
For the primary seven months of the 12 months, the CPI averaged 1.7%, a tad higher than the BSP’s 1.6% full-year forecast.
The Philippine central bank has room to proceed its easing cycle next 12 months after possibly two more quarter-point cuts for the remaining of 2025, in line with 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 must occur for us not to chop rates,” he said. That can likely be followed by one other reduction within the fourth quarter, the governor said.
With inflation this 12 months prone to average below the central bank’s 2%-4% goal and inside that range in 2026, it gives the BSP leeway to further lower borrowing costs “so long as the numbers look good, inflation stays 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 five,351.49.
Value turnover went as much as P6.78 billion on Wednesday with 664.92 million shares traded from the P5.67 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 P211.85 million on Wednesday, a reversal of the P153.3 million in net selling recorded on Tuesday. — R.M.D. Ochave