PSEi slides to 6,300 level on weak peso, IMF view

PHILIPPINE SHARES sank further on Tuesday, with the main index dropping to the 6,300 level anew, due to strong selling pressure amid the peso’s slide against the dollar and weakening economic prospects.

The Philippine Stock Exchange index (PSEi) slumped by 1.31% or 84.92 points to close at 6,352.86, while the all shares index declined by 1.02% or 37.39 points to finish at 3,606.81.

“The Philippine equity space pulled back amid mounting pressures from the free-fall of the Philippine peso and the anticipated mid-January to February seasonal turning point,” AP Securities, Inc. said in a market note.

“Sectoral performance dipped heavily into the red as an intense meltdown was seen mostly in property and financials, while services and mining and oil survived the onslaught of selling today.”

On Tuesday, the peso weakened by 1.5 centavos to finish at P59.455 against the dollar, data from the Bankers Association of the Philippines showed. This is just a shade stronger than its all-time low close of P59.46 recorded on Jan. 15.

“The PSEi ended lower as strong selling pressure was seen across the board. The index showed continued momentum slowdown, breaching back below the 6,300 level,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Market sentiment was weighed down by both global and local uncertainties, compounded by the IMF’s (International Monetary Fund) outlook for slower economic growth in the country.”

IMF said on Monday that the Philippine economy may expand slower until next year as global uncertainties and a corruption controversy continue to drag growth.

In its latest World Economic Outlook (WEO) released on Monday, the IMF said it expects Philippine gross domestic product (GDP) to grow by 5.6% this year, within the government’s 5%-6% goal. This is the same projection given following its Article IV Consultation with the country last December, but slightly lower than its 5.7% estimate in the previous WEO.

The IMF also cut its Philippine growth forecast for 2027 to 5.8% from its 6% projection in October. This also falls within the government’s 5.5%-6.5% target.

Most sectoral indices closed in the red. Property plunged by 2.67% or 63.13 points to 2,296.42; holding firms decreased by 1.88% or 96.50 points to 5,028.68; financials went down by 1.72% or 37.34 points to 2,126.53; and industrials retreated by 1.18% or 108.49 points to 9,051.83.

Meanwhile, services rose by 0.72% or 18.60 points to 2,568.69, and mining and oil went up by 0.33% or 57.56 points to 17,254.94.

Decliners outnumbered advancers, 133 to 68, while 66 names closed unchanged.

Value turnover rose to P7.13 billion on Tuesday with 1.22 billion shares traded from the P5.19 billion with 2.25 billion issues that changed hands on Monday.

Net foreign buying was at P303.41 million versus the P30.34 million in net selling recorded on Monday. — Alexandria Grace C. Magno