PSEi flat as investors await BSP decision

The Philippine Stock Exchange Index (PSEi) closed essentially flat at 6,063.69 on Thursday, 16 April, up 0.34 percent from the previous session, reflecting continued sideways movement as investors remained cautious amid persistent geopolitical and inflation concerns.

Optimism over potential renewed US–Iran peace talks provided some support, even as the Strait of Hormuz remained under a US blockade as of press time. However, this was offset by concerns over rising oil prices and the risk of further policy tightening from the Bangko Sentral ng Pilipinas (BSP), which entered its quiet period ahead of its next monetary policy meeting on 23 April.

The central bank previously cut interest rates twice since December in response to slowing 2025 economic growth, which many analysts attributed to the spillover effects of the flood control infrastructure scandal on government spending and investor sentiment. However, BSP Governor Eli M. Remolona Jr. has signaled that the BSP may consider tightening if inflation accelerates sharply. Inflation rose by 1.7 percentage points in March to 4.1 percent.

A BSP rate hike would make borrowing more expensive, encouraging savings due to higher interest rates while potentially slowing economic activity. This could dampen consumption—the main driver of the Philippine economy—and weigh on growth.

Given the uncertainty, investors largely stayed on the sidelines, with net value turnover at P6.78 billion. Foreign investors remained net sellers, recording outflows of P1.01 billion.

Sectoral performance was mixed. Industrials led the market, up 0.99%, while services lagged, declining 1.79%. Market breadth was slightly negative, with decliners edging advancers, 100 to 91. Among index movers, Metropolitan Bank & Trust Company surged 4.29% to P69.35, leading gains. In contrast, Converge ICT Solutions, Inc. fell 2.76% to P11.96, making it the day’s worst performer.

On the currency front, the peso closed at P59.97 per US dollar, strengthening from the previous day’s P60.115. The appreciation reflects a modest pullback in the dollar and slightly improved risk sentiment, although gains were limited.

Over the past week, the peso has been pressured by a “perfect storm” of factors—elevated global oil prices, safe-haven demand for the US dollar, and geopolitical tensions in the Middle East. Oil price spikes tied to the conflict have raised inflation risks in the Philippines, a net oil importer, contributing to currency weakness.

In the last 24 hours, sentiment improved slightly on renewed hopes of diplomacy between the US and Iran, easing immediate supply concerns. Still, with oil prices elevated and inflation already breaching the BSP’s target, the peso remains vulnerable and is likely to hover near the P60 level in the near term.