PSEi drops to 6,500 after Q1 GDP disappoints

Philippine Stock Exchange

THE stock market on Thursday plunged to the 6,500-point territory following the release of the country’s first-quarter gross domestic product (GDP) data, which came in slower than expected.

Meanwhile, the Philippine currency ended the day flat against the greenback following the release of the first-quarter GDP figure.

By the closing bell, the 30-company Philippine Stock Exchange index (PSEi) had tumbled by 116.72 points, or 1.75 percent, to 6,542.46.

The broader All Shares index likewise declined, retreating by 35.02 points, or 1.0 percent, to 3,481.55.

The Philippine economy grew by 5.7 percent from January to March 2024, lower than the 6.4 percent recorded last year and below the government’s 6.0- to 7.0-percent target.

Philstocks Financial Inc. researcher Mikhail Plopenio said the “dismal” GDP figure weighed on investor sentiment, causing the bourse to close lower.

The first-quarter GDP result “raised worries over the country’s economy amid the lingering headwinds, including inflation and elevated interest rates,” he claimed.

Luis Limlingan, managing director at Regina Capital Development Corp., said the fresh economic data was “disappointing,” having fallen short of the consensus projection of a first-quarter growth of 5.9 percent.

“This was primarily attributed to subdued household spending, which grew by a mere 4.6 percent … amid persistent inflationary pressures and the ongoing El Niño phenomenon,” Limlingan explained.

Foreign investors were net sellers, recording a net outflow of P1.52 billion.

Market participation, meanwhile, was quite strong, with a net market value turnover of P5.66 billion — higher than the year-to-date average of P4.98 billion.

Except for industrial, which advanced by 0.4 percent, all other sector indices closed in the red. The holding firms index dropped the most by 3.02 percent.

Advancers edged out decliners, 95 against 87, while 43 were unchanged.

Peso down slightly

The currency closed at P57.38 against the dollar, marginally higher by only a half centavo from P57.385 previously, data from the Bankers Association of the Philippines showed.

It opened trading at P57.44:$1, ranging from P57.33 to P57.45 during the session.

Volume reached P1.097 billion, slightly lower than the P1.158 billion recorded in the previous session.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso remained flat on perceptions that the softer-than-expected local GDP data could lead to possible local policy rate cuts later this year.

He noted that the peso-dollar rate still corrected higher to among its recent one-week highs “after the slight upward correction in the US dollar vs major global currencies.”