Local shares extend climb on BSP easing hopes

LOCAL SHARES closed higher on Monday on expectations of further monetary easing from the Bangko Sentral ng Pilipinas (BSP) amid dismal growth prospects.

The Philippine Stock Exchange index (PSEi) went up by 0.35% or 21.30 points to end at 6,058.02, while the broader all shares index increased by 0.6% or 20.89 points to 3,455.83.

“The local market extended its rise backed by hopes of further monetary policy easing. This is as BSP Governor Eli M. Remolona, Jr. signaled the possibility of one more policy rate cut by 2026,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“Philippine equities tracked higher as local investors continued pricing in the twin cuts made last week by the BSP and US Fed,” AP Securities, Inc. said in a market note.

The US Federal Reserve cut interest rates by a quarter-percentage point on Wednesday amid a rare split vote, but hinted at hitting pause on more cuts while waiting for better clues on the job market and inflation that “remains somewhat elevated,” Reuters reported.

Wednesday’s cut brought the policy rate to a range of 3.5%-3.75%.

Meanwhile, the BSP on Thursday lowered benchmark interest rates by 25 basis points (bp) bringing the policy rate to 4.5%, the lowest level in more than three years. It has now delivered 200 bps in reductions since August 2024.

Mr. Remolona said benign inflation gives them room to help support weak domestic demand amid lingering governance concerns that have affected investments, but said that they are nearing the end of their current easing cycle.

He left the door open to one final 25-bp cut next year as the central bank said economic prospects have darkened further, with the slowdown in third-quarter growth likely to extend to this quarter and with recovery seen to start only by the second half of 2026.

Most sectoral indices closed higher on Monday. Mining and oil rose by 2.25% or 319.62 points to 14,485.79; property increased by 2% or 45.07 points to 2,295.23; financials went up by 1.82% or 35.87 points to 2,003.61; holding firms added 1.09% or 50.93 points to end at 4,724.23; and industrials climbed by 0.99% or 85.28 points to 8,687.24.

Meanwhile, services slumped by 3.27% or 82.31 points to 2,429.54.

“Ayala Land, Inc. was the day’s index leader, climbing 3.92% to P22.55. International Container Terminal Services, Inc. was the day’s main index laggard, falling 4.75% to P581,” Mr. Tantiangco said.

Advancers outnumbered decliners, 131 to 81, while 50 names closed unchanged.

Value turnover went down to P6.41 billion on Monday with 749.33 million shares traded from the P7.28 billion with 1.68 billion issues dealt on Friday.

Net foreign selling increased to P348.5 million from P307.48 million. — A.G.C. Magno with Reuters