Index drops as growth disappoints
Philippine Stock Exchange index declined by 116.72 points to close at 6,542.46, while All Shares likewise dropped by 35.02 points to 3,481.55
Daily TribunePhilippine Stock Exchange index declined by 116.72 points to close at 6,542.46, while All Shares likewise dropped by 35.02 points to 3,481.55
The equities market ended the day in negative following the slower-than-expected first-quarter economic growth data, while the peso closed flat on Thursday.
The Philippine Stock Exchange index (PSEi) declined by 116.72 points to close at 6,542.46, while All Shares likewise dropped by 35.02 points to 3,481.55.
“The local market plunged by 116.72 points (1.75 percent) to 6,542.46 as investors were weighed by the dismal Q1 (first quarter) 2024 GDP (gross domestic product) data with growth coming in at 5.7 percent, falling below expectations and the government’s target range of 6 percent-7 percent,” Philstocks Financial Inc. analyst Mikhail Philippe Plopenio said.
“Gross domestic product stood at 5.7 percent, falling short of the consensus projection of 5.9 percent and trailing behind the government’s target range of 6 percent to 7 percent. This was primarily attributed to subdued household spending, which grew by a mere 4.6 percent, marking its slowest pace since third quarter of 2010, amid persistent inflationary pressures and the ongoing El Niño phenomenon,” Regina Capital Development Corp. managing director Luis Limlingan said.
Rates likely to hold anew
The Bangko Sentral ng Pilipinas’ (BSP) Monetary Board will meet next week to decide on the monetary policy.
BSP Governor Eli Remolona will likely factor in slower-than-expected inflation and below-consensus growth when the monetary board meets on 16 May, according to ING senior economist Nicholas Mapa.
“We do not expect any adjustment to the current policy settings. However, a sustained deceleration of inflation and disappointment on the growth front could convince the BSP to cut rates as soon as the Fed does later this year,” he said.
Previous rhetoric from Remolona pointed to BSP’s first rate cut by 1Q 2025 but recent data reports could prod Remolona to push forward his rate cut timing.
The peso was little changed after the release with market participants likely factoring in no-change from BSP next week.
