Share prices on the Philippine Stock Exchange fell on Thursday after US President Donald Trump announced a 17 percent levy on Philippine exports to the US as part of his reciprocal tariff on America’s trading partners.
“Philippine shares were sold down after holding steady the last couple of trading days as markets around the world reacted to President Trump’s tariff rollout,” Regina Capital and Development Corp. Managing Director Luis Limlingan said.
He added that the market was faring better in early morning trade than most regional peers, before profit-taking set in and drove prices lower until the closing bell.
The PSEi dropped 1.63 percent or 101.95 points to 6,145.73. The broader All Shares lost 1.1 percent or 40.71 points to 3,664.41.
Losers outnumbered gainers 125 to 71, with 54 stocks closing unchanged. Trading value reached more than P4.62 billion.
In the year-to date, the benchmark PSEi has lost 5.8 percent from 6,528.79 where the market closed on the last trading day of 2024. It is also 32.16 percent off its January 29, 2018 record closing high of 9,058.62.
“Sentiment towards the global economy was dampened by the expected negative consequence of the US reciprocal tariffs,” Philstocks Financial Inc. said in a market recap.
Seth Pangan, trader at Diversified Securities Inc., said nearly all the sectors were “hugely down” except mining and oil, which got a boost from surging gold prices.
“Gold stocks were up due to an uptick in gold as safe haven,” he said.
Trump’s tariff covers a baseline of 10 percent, with the rates varying in degrees based on America’s particular trading partner.
Apart from Chinese imports, which will bear a 34 percent tariff on top of the 20 percent Trump had previously imposed, Vietnam faces 46 percent levies, Thailand 36 percent, South Korea 25 percent and India 26 percent.
In an investors’ note, Abacus Securities Corp. said the final numbers were “probably larger than what most were expecting but … significantly lower (for the Philippines) compared with the Asean average (ex-Singapore) of more than 37 percent.”
“As we noted previously, the biggest exposure, at least as it relates to the stock market, is through exports of electronics and integrated circuits and coconuts and coconut derivatives. Other large items include office equipment and insulated wires, neither of which involves any listed company and probably includes the re-export of items coming from China,” it said.
The US tariffs contagion for the Philippine economy, however, will be limited.
“Given how markets work … fear might come ahead of reason. The problem is that total tariffs on China and the EU are huge and nobody knows exactly how this will reconfigure the global economy. Our advice, therefore, is stay on the sidelines over the next few days as it will take a while for investors to fully absorb the implication of Trump’s tariffs,” Abacus said.
Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said there is “little detail and no clear rules on trade, leading to continued uncertainty and dampened consumer and corporate confidence.”
This would suggest “a roadmap for bilateral negotiations and an open-ended trade war with geo-strategic implications,” he said.
“Retaliation from trade partners, currency volatility, and depreciations are expected, which will help estimate economic deadweight losses. Tariff threats create uncertainty around potential rate cuts and jeopardize the stability of the Philippine peso,” Ravelas added.
What the US tariffs boil down to is that Philippine goods exports to the US will be 17 percent more expensive, according to Michael Ricafort, chief economist at Rizal Commercial Banking Corp.
“So this could still lead to slower demand for Philippine exports to the US that, in turn, could lead to slower overall Philippine economic … growth,” he added.
Most actively traded International Container Terminal Services Inc. dropped P8.60 to P353. Jollibee Foods Corp. shed P7.20 to P224. BDO Unibank Inc. declined P2.40 to P155.60. Bank of the Philippine Islands lost P4.20 to P133.90. PLDT Inc. declined P10 to P1,250. DigiPlus Interactive Corp. fell P1.60 to P35.65. Ayala Land Inc. slipped P0.15 to P23.75. Manila Electric Co. gained P8 to P550. Ayala Corp. dropped P25 to P566. SM Investments Corp. retreated P7 to P785. — with a report from Reuters
