PHILIPPINE STOCKS closed lower for a fourth straight day on Tuesday as the market reacted to President Ferdinand R. Marcos, Jr.’s State of the Nation Address (SONA).
The benchmark Philippine Stock Exchange index (PSEi) dropped by 0.85% or 54.33 points to close at 6,325.42, while the broader all shares index fell by 0.35% or 13.41 points to 3,780.08.
“The local market extended its decline as investors digested Mr. Marcos’ latest SONA,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message. “Investors expressed dismay as some of the most pressing issues currently were not mentioned in the SONA including online gaming regulations, US-Philippines trade relations, and fiscal consolidation plans.”
In his fourth SONA, Mr. Marcos talked about economic growth, food security, energy reforms, and social services, but left out topics such as online gambling as well as the 19% tariff on Philippine exports to the US that will take effect on Aug. 1.
“The PSEi declined as the market is still digesting the news that Bangko Sentral ng Pilipinas (BSP) is set for two more rate cuts for this year. Also, prices are already reflecting the sentiments of the investors regarding the earnings of various companies,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
The Philippine central bank is committed to maintaining its easing bias and is on course to cut policy rates twice this year, its governor said on Monday, though the timing will depend on economic growth and inflation, Reuters reported.
“We’re still on that same easing cycle,” BSP Governor Eli M. Remolona, Jr. told Reuters. “We’re doing baby steps. That’s a good sign, that means we’re on track.”
The Bangko Sentral ng Pilipinas is closely monitoring economic indicators to guide its decisions, including whether to implement a rate cut at its upcoming Aug. 28 policy meeting. He emphasized that weaker-than-expected growth and better-than-projected inflation would be key triggers for further easing.
Almost all sectoral indices closed lower on Tuesday. Services sank by 2.01% or 45.77 points to 2,224.39; mining and oil decreased by 1.72% or 159.41 points to 9,093.87; holding firms went down by 0.69% or 38.05 points to 5,403.78; financials retreated by 0.07% or 1.65 points to 2,236.31; and industrials declined by 0.79 point to 9,096.97.
Meanwhile, property inched up by 0.04% or 1 point to 2,359.42.
Value turnover rose to P6.86 billion on Tuesday with 1.04 billion shares exchanged from P6.61 billion with 1.11 billion shares traded on Monday.
Decliners outnumbered advancers, 117 versus 70, while 62 names were unchanged.
Net foreign selling increased to P429.15 million on Tuesday from P156 million on Monday. — Revin Mikhael D. Ochave with Reuters
