PHILIPPINE STOCKS may rebound this week as the Bangko Sentral ng Pilipinas (BSP) is expected to cut benchmark interest rates following slower-than-expected March headline inflation.
On Friday, the bellwether Philippine Stock Exchange index (PSEi) fell by 1% or 61.54 points to close at 6,084.19, while the broader all shares index declined by 0.57% or 20.97 points to 3,643.44.
Week on week, the PSEi dropped by 1.03% or 63.25 points from its 6,147.44 finish on March 28, marking its fourth consecutive week in the red.
“US President Donald J. Trump’s ‘Liberation Day’ tariffs hit capital markets, fanning global risk-off sentiment, and eclipsing the 1.8% Philippine inflation in March,” online brokerage 2TradeAsia.com said in a market note.
“The bearish sentiment was sustained in last week’s trading as the US unveiled its reciprocal tariffs, which are expected to have a negative effect on the global economy… Trading has been anemic, reflecting the weak market confidence amid the global downside risks,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
On Thursday, Mr. Trump announced sweeping tariffs as part of his Liberation Day plan that seeks to protect US production, imposing a 10% baseline tariff on all imports and higher targeted duties on dozens of countries. An annex document to the executive order on the tariffs showed an 18% reciprocal tariff for the Philippines.
For this week, Mr. Tantiangco said the PSEi may rebound on bargain hunting.
“Expectations that the BSP will cut policy rates in their upcoming meeting following the further decline in inflation last March may give sentiment a boost,” he said. “However, the global economic concerns amid the US’ tariff policies are still expected to weigh on the market, tempering the potential rise next week. Shocks in the form of new tariff announcements from the US pose downside risks that may pull the market lower.”
Mr. Tantiangco put the PSEi’s support at 6,000 and resistance at 6,400.
Philippine headline inflation eased to 1.8% in March from 2.1% in February and 3.7% a year ago.
This was within the BSP’s 1.7%-2.5% forecast for the month and below the 2% median estimate in a BusinessWorld poll of 18 analysts.
Analysts said the slower March inflation print gives the BSP ample room to resume its easing cycle when it meets to review policy on Thursday. All 17 analysts in a BusinessWorld poll conducted last week expect the Monetary Board to reduce the target reverse repurchase rate by 25 basis points to 5.5% at its April 10 meeting.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort placed the PSEi’s support at 6,000 and resistance at 6,275 to 6,530.
For its part, 2TradeAsia.com pegged support at 6,000 and resistance at 6,400. — Revin Mikhael D. Ochave
