PHILIPPINE stocks ended Friday higher, surging past 6,800 points, while the local currency retreated back to the P57 per US dollar level following the Bangko Sentral ng Pilipinas’ (BSP) decision to cut key rates on Thursday.
The benchmark Philippine Stock Exchange index surged 154.46 points, or 2.31 percent, to close at 6,847.37, and was also up by a solid 200 points week on week.
The broader All Shares index rose 1.74 percent, or 63.27 points, to 3,691.42.
The policymaking Monetary Board cut key interest rates Thursday by 25 basis points to 6.25 percent. The last time the Philippine central bank cut key rates was in November 2020.
Japhet Tantiangco, senior research analyst at Philstocks Financial Inc., said local stocks surged as the market cheered the central bank’s rate cut decision.
“The move is taken as the start of the BSP’s monetary policy easing phase, which would help the corporate sector and boost overall economic growth,” he added.
“Adding to the positive factors was the spillover from Wall Street’s rally overnight amid easing recession worries in the US,” Tantiangco continued.
“Trading was active, with net value turnover registering P6.66 billion, higher than the year-to-date average of P4.92 billion,” he noted.
Luis Limlingan, managing director at Regina Capital Development Corp., said “Philippine shares rallied [higher] as investors reacted to the BSP interest rate decision.”
“The market closed just before the BSP announced a 25-basis-point cut yesterday (Thursday), lowering the key policy rate to 6.25 percent,” Limlingan said, noting that it was the BSP’s “first rate reduction in nearly four years.”
“The positive sentiment was reinforced as Wall Street finished in the green as investors reacted to stronger-than-expected retail sales and a decline in weekly jobless claims, easing concerns about a potential recession that [had driven] a global sell-off earlier this month,” he continued.
All sectoral indices on the PSE ended in the green, with services gaining the most, up 3.12 percent, followed by financials (up 2.15 percent) and property (up 1.91 percent).
Gainers edged out decliners, 134 against 68, while 50 stocks were unchanged.
On the other hand, the peso ended its three-day winning streak against the US dollar after the rate cut announcement by the BSP.
The Philippine peso closed Friday at P57.245 against the greenback, weaker by 34.5 centavos from Thursday’s P56.90 per dollar, data from the Bankers Association of the Philippines showed.
The local currency opened trading at P57.12 to the dollar and ranged from P57.12 to P57.28.
Volume reached P1.444 billion, higher than the previous session’s P1.329 billion.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., suggested that one factor for peso’s retreat was that the US dollar had strengthened against major global currencies.
In addition, he said sentiment on the local currency wavered as the BSP’s move to cut policy rates to 6.25 percent meant that its key rates were now at a 0.75 percentage point premium over the US Fed’s rate.
Market observers noted that the BSP’s rate cut was also ahead of the US Federal Reserve’s widely anticipated possible rate cut next month, which further affected sentiment toward the Philippine peso.
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