Share prices fell on Tuesday as investors traded nervously over the impact of the rate cuts expected at the conclusion of the policy meeting of the Bangko Sental ng Pilipinas (BSP) and the moves by the US Federal Reserve this week.
The Philippine Stock Exchange index (PSEi) dropped 113.45 points or 1.72 percent to 6,501.71, while the broader All Shares index shed 42.3 points or 0.01 percent to 3,752.51.
Losers edged gainers 124 to 65, with market turnover hitting P6.6 billion.
Broker DA Market Securities Inc. said the PSEi’s decline led losses across Asian markets on the back of a “weakening peso” and “caution over potential interest rate adjustments.”
The US Fed is expected to cut rates for the third time this year. The BSP is likewise seen trimming rates for a third consecutive time, with further reductions seen next year.
DA Market Securities, however, said US risks may delay future rate cuts by the BSP, as uncertainty regarding further rate cuts by the Trump administration could weaken the peso and could impact the decision on monetary easing.
Philstocks Financial Inc. said investors noted the upside risk to US inflation under the regime of President-elect Donald Trump’s planned protectionist policies.
The US Fed meeting concludes Thursday dawn (Manila time) while the BSP will release its latest policy decision Thursday afternoon.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso closed weaker against the US dollar for the third consecutive session at 58.871, much lower than Monday’s 58.671.
The currency opened at 58.74, before hitting a high of 58.71 and a low of 58.885. Trading volume reached $1.43 billion.
Most actively traded International Container Terminal Services Inc. was down P14.60 at P385.40. Ayala Land Inc. lost P0.55 to end at P25.70. Bank of the Philippine Islands fell P6.30 to P25.70. BDO Unibank Inc. slipped P0.70 to P149. SM Prime Holdings Inc. dropped P0.30 to P25.90.
