PSEi falls as rates rise, peso weakens

Philippine stocks retreated on Friday as investors weighed the impact of higher borrowing costs on economic growth, while a weakening peso added to market jitters.

The benchmark Philippine Stock Exchange Index (PSEi) dropped 0.88 percent, or 51.1 points, to close at 5,728.63.

Philstocks Financial Inc. research manager Japhet Tantiangco attributed the decline to the Bangko Sentral ng Pilipinas’ 50-basis-point rate hike on Thursday.

While the move could help contain inflation, Tantiangco said it could also slow economic growth further. The peso’s continued depreciation also weighed on stocks.

The central bank’s latest increase brought its policy rate to 5.5 percent.

Luis Limlingan, head of sales at Regina Capital Development Corp., likewise said investors were still assessing the rate hike, with losses across Asian markets further weakening sentiment.

“The continued depreciation of the peso also weighed on the local market, adding to concerns over the domestic economic outlook,” he said.

“Meanwhile, declining precious metal prices amid persistently elevated oil prices further contributed to cautious investor sentiment,” he added.

Decliners outnumbered gainers, 111 to 66, while 56 stocks were unchanged. Turnover reached P4.53 billion, excluding extraordinary block sales.

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Friday’s retreat left the PSEi down 54.07 points, or 0.94 percent, for the week, a report from DragonFi Securities Inc. showed.

Aboitiz Equity Ventures Inc. led the index’s weekly gainers, advancing 3.21 percent. Ayala Land Inc. followed with a 2.08-percent increase, while Metropolitan Bank & Trust Co. added 1.99 percent.

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