Investors took gains on Thursday after the government reported the Philippine economy grew a slower-than-forecast 5.4 percent for the first quarter.
Analysts had forecast a median 5.7 percent for the quarter.
Investors sold shares for profit as the first quarter gross domestic product (GDP) results were being reported, Luis Limlingan, managing director at Regina Capital and Development Corp., said.
The PSEi dropped 1.17 percent or 75.96 points to 6,389.49.
The broader All Shares lost 28.03 points or 0.74 percent to 3,740.35.
Losers outnumbered gainers 113 to 75, with 54 stocks unchanged. Trading value reached P6.01 billion.
Alfred Benjamin Garcia, head of research at AP Securities Inc., said the market opened strong “but quickly sank into negative territory after the first-quarter GDP numbers missed estimates.”
The slowdown in GDP growth from 5.9 percent a year earlier also supports the argument for a more dovish central bank moving forward, ING Bank said.
ING said it is “increasingly likely that Bangko Sentral ng Pilipinas (BSP) will cut rates aggressively this year,” as a result of the country’s economic performance.
“We continue to anticipate another 75 basis points of rate cuts in 2025,” the bank said.
Jonathan Ravelas, managing director at eManagement for Business and Marketing Services, noted that BSP Governor Remolona previously indicated the likelihood of up to 75 basis points in rate cuts this year.
“Initially, only one more 25 basis point cut was anticipated in June, Ravelas said.
“However, with the slower growth, there is now potential for a third rate cut in the second half of 2025,” he said.
Investors should expect the market to “sideways-to-down movements” in the near term.
The PSEi bucked the overnight uptick on Wall Street after the US Federal Reserve kept interest rates steady as expected.
Fed Chairman Jerome Powell in a briefing after their meeting downplayed the chance of a rate cut when they meet in June, noting that US President Donald Trump’s trade policy risks higher inflation, higher unemployment and an economic slowdown.
Investors are now looking forward to the meeting between US and Chinese trade officials in Switzerland as initial steps to mend the ties between the world’s two biggest economies that was ruffled by Trump’s tariff regime.
Most actively traded International Container Terminal Services Inc. gained P2.40 to P385.40. BDO Unibank Inc. shed P1.10 to P164.10. Ayala Land Inc. lost P0.55 to P23.45. DigiPlus Interactive Corp. rose P0.05 to P42. Bank of the Philippine Islands lost P3.50 to P134.50. Metropolitan Bank and Trust Co. advanced P0.65 to P76.85. SM Prime Holdings Inc. declined P0.60 to P23.55. Bloomberry Resort Corp. went up P0.09 to P4.09. Ayala Corp. retreated P17 to P570. Manila Electric Co. fell P1.50 to P570. –with a report from Reuters
