PHILIPPINE SHARES may move sideways this week as investors digest companies’ mixed financial results and keep a cautious stance as they look ahead to the Bangko Sentral ng Pilipinas’ (BSP) policy meeting.
On Friday, the Philippine Stock Exchange index (PSEi) rose by 0.14% or 9.05 points to close at 6,297.30, while the broader all shares index edged up by 0.06% or 1.94 points to end at 3,439.17.
Week on week, the PSEi increased by 6.95 points from Aug. 7’s finish of 6,290.35.
“The local market rose, taking cues from Wall Street’s overnight climb. This comes on the back of favorable inflation figures in the US which raise hopes that the Federal Reserve won’t take a hawkish stance moving forward. Appreciation of second-quarter/first half (Q2/1H) corporate results of selected companies also helped in Friday’s climb,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message last week.
“The local bourse finished virtually flat, inching 7 points up to close at 6,297. Financials led the rise, as softer US inflation print doused possibility for a Federal Reserve rate hike, plus sticky local inflation might prod the Bangko Sentral ng Pilipinas to adopt a rate pause,” F. Yap Securities, Inc. said in a market note.
Asian stocks rose on Friday, poised for their strongest week in two months as benign inflation data dented expectations of an imminent US rate hike, although faltering talks to end the war in the Middle East are likely to keep risk sentiment in check, Reuters reported.
US inflation reports last week suggested pricing pressure remained under control, lowering the odds of a rate increase from the US Federal Reserve next month.
Meanwhile, BSP Governor Eli M. Remolona, Jr. said last week that weak economic growth last quarter gives the Philippine central bank room to take a less aggressive approach to monetary tightening, but they still need clearer proof that inflation is moving sustainably lower.
For this week, F. Yap Securities said the market could position before the BSP’s Aug. 27 meeting. “(I)nflation eased to 6.2% in July but remains well above the 2-4% target, and the peso is trading near 61.40 per dollar. That leaves little room to exit the BSP’s current hawkish position at the 4.75% policy rate without risking renewed currency pressure. Our base case is a hold with very hawkish language attached, which should keep equity multiples capped until the Fed moves with more conviction.”
The Monetary Board has raised its benchmark policy rate by 50 basis points since it began tightening in April, bringing the key rate to 4.75%.
Earnings results so far have shown the mixed impact of weaker macroeconomic conditions, F. Yap Securities added. “Q2 earnings season so far reemphasizes the transition from volume growth focus in late 2025 towards a more cost disciplined philosophy in 2026. Banks and core utilities defended margins… while consumer discretionary and property names showed compression under sticky inflation.” — A.G.C. Magno
