Stock barometer seentesting 6,500

The Philippine Stock Exchange Composite Index (PSEi) is expected to hover between 6,300 and 6,500 over the next two weeks, as inflation is expected to remain low despite concerns about possible oil price hikes due to the Iran-Israel conflict, according to a Bank of the Philippine Islands (BPI) Securities Corp. assessment.

BPI Securities president Mark Race said companies could sustain profit growth as consumers gain extra funds amid declining prices of food, utilities and transportation.

“As a major oil importer, the Philippines is exposed to price shocks. However, we take a measured view, year-to-date, the key inflation drivers for the early second quarter reflect moderation, particularly in food and utility costs, and easing transport prices,” he said.

“We continue to trade above the 6,300 level, with 6,500 acting as immediate resistance. Over the next two weeks, we expect the PSEi to remain within this band,” Race continued.

Inflation projection lower

In its Monetary Policy meeting last Thursday, the Bangko Sentral ng Pilipinas (BSP) downgraded its average overall inflation forecast for this year to 1.6 percent from 2.4 percent.

However, BSP slightly raised its outlook for next year to 3.4 percent from 3.3 percent. For 2027, the Central Bank also increased its forecast to 3.3 percent from 3.2 percent.

The better near-term projection encouraged the BSP to cut its policy rate by 25 basis points to 5.25 percent last Thursday.

“More importantly, the Philippines is a consumption-driven economy with strong fundamentals. Combined with the possibility of lower interest rates, this remains a compelling proposition for select foreign funds,” Race said.

Data from the stock exchange showed that net foreign selling reached P35 to P36 billion as of June.

The market pundit, however, said this reflected a non-dramatic and expected movement amid persisting concerns about the global economy, induced by Trump’s tariffs.

“Foreign holdings in Philippine stocks have declined in recent years, which has helped reduce the scale of sell-offs during periods of volatility,” he said.