PSEi extends climb as BSP chief signals more cuts

Philippine shares climbed further on Wednesday on hopes for further rate cuts from the Bangko Sentral ng Pilipinas (BSP) amid easing inflation and with the United States and China set to hold trade talks.

The bellwether Philippine Stock Exchange index (PSEi) increased by 0.72% or 46.76 points to close at 6,465.45, while the broader all shares index went up by 0.59% or 22.26 points to 3,768.38.

Market sentiment was broadly positive as the PSEi traded as high as 6,531.99 intraday but gave up some of its gains before the closing bell.

“The local market extended its rise as investors continued to digest the Philippines’ April inflation of 1.4%, which is seen to give the BSP more room to cut policy rates,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message. “Investors also cheered the progress between the US-China relations as representatives from the two countries are set to discuss trade matters this week.”

“Philippine shares were bought up second day straight post-inflation with the local bourse reaching 6,500 level, but gains were tempered by profit taking later in the session,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The Philippine central bank is open to cutting its key interest rate by a further 75 basis points (bps) for the rest of the year as inflation continued to ease, according to BSP Governor Eli M. Remolona, Jr., Bloomberg reported.

“On the table, yes,” Mr. Remolona said in a mobile-phone message on Wednesday when asked if it’s possible for the Bangko Sentral ng Pilipinas to reduce the benchmark rate by 75 bps more this year after inflation further slowed in April.

The Monetary Board last month resumed its easing cycle after an unexpected pause in February as it slashed benchmark rates by 25 bps, bringing the policy rate to 5.5%.

Meanwhile, US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China’s economic tsar He Lifeng in Switzerland for trade talks this weekend.

Almost all sectoral indices closed higher on Wednesday. Industrials rose by 1.36% or 122.24 points to 9,112.02; services increased by 1.18% or 24.22 points to 2,072.38; financials went up by 1.13% or 27.77 points to 2,486.22; mining and oil climbed by 0.16% or 16.10 points to 9,721.48; and holding firms inched up by 0.08% or 4.46 points to 5,391.64.

Meanwhile, property declined by 0.35% or 8.16 points to 2,292.81.

Value turnover increased to PHP 8.27 billion on Wednesday with 958.47 million issues traded from the PHP 6.15 billion with 876.09 million shares exchanged on Tuesday.

Advancers beat decliners, 113 versus 72, while 48 issues were unchanged.

Net foreign buying went down to PHP 671.55 million on Wednesday from P690.87 million on Tuesday. — Revin Mikhael D. Ochave with Bloomberg