Record debt dampens PSEI activity, peso

The Philippine Stock Exchange Index (PSEi) declined on Wednesday, slipping 0.45 percent to 6,372.95, as investors turned cautious amid lingering uncertainties surrounding the domestic economic outlook.

Market sentiment was further dampened after the government reported that the country’s outstanding debt climbed to a record P17.71 trillion. Traders also adopted a wait-and-see approach ahead of the release of the Philippines’ January inflation data.

Foreign investors remained net buyers

Market activity remained subdued, with net value turnover reaching P6.04 billion, below the year-to-date average of P6.54 billion. Despite the decline, foreign investors remained net buyers, posting P279.62 million in net inflows.

Sector performance was mixed. Mining stocks led the gains, rising 1.92 percent, while property stocks recorded the steepest losses, dropping 1.45 percent. Market breadth slightly favored gainers, with advancers edging decliners, 104 to 94.

Globe Telecom was top performer

Among blue chips, Globe Telecom Inc. emerged as the top performer, surging 5.07 percent to P1,678.00 per share while San Miguel Corporation was today’s biggest loser, declining 4.31 percent to P76.55.

The Philippine peso weakened to P58.97 per US dollar, compared with yesterday’s close of P58.89, reflecting a modest depreciation.

The peso’s decline was partly influenced by mild strength in the US dollar as investors positioned themselves ahead of key US economic indicators and Federal Reserve signals.

When expectations lean toward prolonged higher US interest rates, capital typically shifts toward dollar assets, putting pressure on emerging-market currencies like the peso.

Record-high national debt

Investor attention on the Philippines’ record-high national debt added pressure on the currency. Rising debt levels may raise concerns about fiscal sustainability, potentially weakening confidence in local assets and the currency.

Foreign exchange markets also remained cautious ahead of the release of January inflation data. If inflation remains elevated, it could complicate monetary policy decisions and affect interest rate expectations, which directly influence currency demand.