Rate hike woes may keep PSEi below 6,000

Philippine stocks may remain within the 5,500-to-6,000 range this week as investors contend with possible interest rate hikes, weaker economic prospects and tighter liquidity.

F. Yap Securities Inc. said risk assets should remain underweight as cash and short-dated fixed income become more attractive amid elevated interest rates.

Still, the brokerage sees trading opportunities in dollar earners such as ports and infrastructure companies.

It also favors large-cap banks, whose margins could benefit from higher rates.

Investors will watch the Bangko Sentral ng Pilipinas’ (BSP) September inflation outlook and the latest US payroll data.

F. Yap said market consensus was building around another 25-basis-point BSP rate hike before yearend.

The brokerage said the US Federal Reserve’s hawkish stance had pushed the US 10-year yield closer to 5 percent, limiting monetary policy flexibility in other markets.

At home, the 6.1-percent inflation rate in August may not mark the peak of the current cycle.

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Higher energy costs, a weaker peso and weather-related disruptions could push September inflation toward 6.5 percent, it added.

The outlook was also clouded by recent growth downgrades.

S&P Global cut its 2026 Philippine growth forecast to 2.9 percent from 4.1 percent, while the Asian Development Bank lowered its projection to 3.3 percent from 3.8 percent.

F. Yap said the economy would need to grow by 4.4 percent in the second half to reach the lower end of the government’s revised 3.5-percent to 4.5-percent target.