Market welcomes BSP rate cut; Peso over P58

The local bourse closed the trading week in the green, with the Philippine Stock Exchange Index (PSEi) ending Friday’s session at 6,465.12, up 0.90 percent.

Investors cheered the Bangko Sentral ng Pilipinas (BSP)’s decision on Thursday to continue its monetary policy easing cycle. The central bank’s Monetary Board resolved to reduce the target reverse repurchase rate (RRP) by another 25 basis points, citing manageable headline inflation, lower-than-expected investor confidence, and sluggish economic growth in 2025 due to the flood control scandal.

With the RRP now at 4.25 percent, investors welcomed the prospect of increased liquidity in the country following the BSP’s second key policy rate cut in three months. While the full effects of rate cuts typically materialize within one to two years, the expected rise in liquidity is seen to stimulate economic activity, with additional cash supporting consumption — the primary driver of Philippine GDP growth.

Despite the positive macroeconomic signal from the central bank, overall market participation remained light, with net value turnover at P5.37 billion, still below the year-to-date average of P6.25 billion.

Foreign investors reverted to net buyers, posting inflows of P351.89 million, helping lift the benchmark. Gains were broad-based, with all sectors finishing in positive territory. Banks led the rally with a 1.68 percent increase, partly driven by recent strong income reports from the Bank of the Philippine Islands and EastWest.

Market breadth was positive, as advancers outnumbered decliners, 107 to 93. Puregold Price Club, Inc. emerged as the session’s top index gainer, rising 3.85 percent to P40.50, while ACEN Corporation was the main laggard, dropping 3.23 percent to P2.70.

The divergence between Puregold Price Club, Inc. (PGOLD) and ACEN Corporation (ACEN) reflected investor positioning following the BSP’s rate cut. Puregold advanced as lower borrowing costs are expected to support consumer spending, benefiting staple retailers with steady cash flows and defensive earnings profiles. Foreign buying and rotation into stable large-cap names further supported the stock.

In contrast, ACEN declined as investors rotated out of rate-sensitive, leveraged growth plays. Despite the domestic rate cut, elevated global yields and funding cost concerns weighed on renewable energy names, prompting profit-taking and pressuring ACEN’s valuation.

Meanwhile, the peso slipped back above the P58 threshold, closing at P58.15 per dollar on Friday, weaker than Thursday’s P57.99 finish. The move reflected broader currency pressures rather than purely domestic foreign exchange weakness.

Over the past 24 hours, escalating U.S.–Iran tensions and rising oil prices bolstered the dollar as traders priced in potential supply disruptions, pushing Brent crude above $71–$72 per barrel amid concerns over conflict near the Strait of Hormuz. This lifted the U.S. Dollar Index and exerted pressure on many Asian currencies, including the peso, offsetting some of the BSP’s rate-cut impact and contributing to the modest FX retracement.

Friday’s slight weakening coincided with a firmer U.S. dollar trend, as the greenback strengthened against major and regional currencies amid higher U.S. Treasury yields and renewed safe-haven demand. As a result, the peso’s move back above the P58 mark reflects a broader dollar bid and profit-taking after recent gains, rather than a sharp deterioration in local fundamentals.