Share prices dropped on Thursday amid heightened risk-aversion by investors who had to deal with assessing the impact of President Ferdinand Marcos’ cabinet courtesy resignations before they could even fully digest the overnight losses on Wall Street.
Marcos earlier in the day ordered his cabinet secretaries to tender their courtesy resignations following a weak showing of the admin ticket in the recently concluded midterm election.
Risk-off sentiment prevailed, even as Wall Street retreated overnight over concerns about the US’ credit rating downgrade that continued to push Treasury yields higher, Luis Limlingan, managing director at Regina Capital and Development Corp. said.
“Investor caution was further heightened by domestic political uncertainty after President Marcos Jr.’s call for the courtesy resignation of his Cabinet secretaries, seen by some as a possible shift in policy direction,” Limlingan added.
The PSEi lost 1.1 percent or 69.98 points to 6,305.37.
The broader All Shares shed 0.8 percent or 29.76 points to 3,708.18.
Losers outnumbered gainers 112 to 66, with 57 stocks unchanged. Trading turnover reached P6.39 billion.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., noted that the 10-year US Treasury yields settled at a new one-month high at 4.58 percent overnight, suggesting the potential to “increase the borrowing/financing cost of listed companies in the US and worldwide.”
A Reuters report, meanwhile, said that following an auction that attracted soft demand, the yields on the 20-year debt rose to 5.127 percent, the highest since November 2023.
Marcos expressed his intention to give his office “the elbow room to evaluate the performance of each department and determine who will continue to serve in line with his administration’s recalibrated priorities.”
Jonathan Ravelas, senior adviser at Reyes Tacandong and Co., said the directive “appears to be a strategic move” that gives Malacanang an “opportunity to realign priorities after the midterm elections.”
“It signals a push for greater accountability and results within the administration,” he said.
Ravelas said Marcos’ move gives him the leeway to refocus “on strengthening economic resilience, improving food security, and ensuring energy stability—key areas that directly impact Filipinos amid global and domestic challenges.”
Astro del Castillo, managing director at First Grade Finance Inc., however said the decision carries uncertainties on the economic policies of the government.
“Though I somewhat understand where the president is coming from, the shotgun approach will reverberate to most if not all sectors of the economy. The policies and programs will surely be affected as what we’ve seen during the past administrations who applied the same strategy,” del Castillo said.
Del Castillo noted that “it will take time before a new cabinet secretary, including Usec, Asec, and Directors buckle down to work.”
The decision also sends a mixed signal to the market, given that the government has been regularly announcing its accomplishments months ago, he said.
“The sudden call for resignation of all cabsecs contradicts what they’ve been saying. Even the financial markets remain confused,” del Castillo said, adding that it will lead to “slowdown of our economic engine” as all sectors await the transition.
“The Philippines has a poor track record of continuity but a good record of creating uncertainty,” he added.
At the same del Castillo said the decision adds to the to “chaotic environment” that will arise from the upcoming impeachment trial of Vice President Sara Duterte-Carpio.
Most actively traded Bank of the Philippine Islands shed P0.70 to P136. Metropolitan Bank and Trust Co. lost P2.35 to P72.95. International Container Terminal Services Inc. eased P0.20 to P400. BDO Unibank Inc. gained P0.50 to P158.50. Ayala Land Inc. lost P0.40 to P22.60. Universal Robina Corp. closed lower by P3.10 at P83.50. Emperador Inc. gained P0.14 to P13.80. SM Prime Holdings Inc. lost P0.35 to P22.70. PLDT Inc. shed P39 to P1,215. DigiPlus Interactive Corp. dipped P0.85 to P48.30. (with additional report from Reuters.)
