Share prices plunged below 6,400 level on Thursday after the Philippine economy grew at a slow pace in the first quarter of the year.
The bellwether Philippine Stock Exchange index dropped 75.96 points or 1.17 percent to close at 6,389.49. The wider all shares declined by 28.03 points or 0.74 percent to 3,740.35.
The Philippine economy grew 5.4 percent year-on-year in the first quarter of 2025, the Philippine Statistics Authority (PSA) said Thursday.
This was slower than the 5.9 percent expansion seen in the first quarter of 2024, but slightly faster than the 5.4 percent growth observed in the fourth quarter.
Veteran stockbroker Jonathan Ravelas said the first quarter gross domestic product is below than market consensus of 5.7 percent.
“This weaker-than-expected growth supports Bangko Sentral ng Pilipinas’ dovish stance,” Ravelas said.
With the slower growth, Ravelas said there is could be two more rate cuts in the second half of the year.
Meanwhile, all sectors ended negative territory with holding firms leading the decline, falling by 2.02 percent. This was followed by mining and oil which dropped by 1.98 percent and property by 1.64 percent.
Value turnover reached P5.72 billion.
Foreign investors turned net sellers with outflows reaching P18.84 million.
Puregold Price Club Inc. led index gainers, rising by 3.74 percent to P33.30 per share. On the other hand, ICT Converge Solutions Inc. declined by 3.11 percent to P18.70 each.
Asian and European markets mostly rose Thursday ahead of weekend tariff talks between China and the United States, with London boosted by reports that a “major trade deal” flagged by Donald Trump was with Britain.
After the fireworks sparked by the US president’s “Liberation Day” on April 2, markets have enjoyed a period of calm in recent weeks on optimism that countries will reach agreements with Washington to avoid his potentially damaging tariffs.
That sentiment was given a boost this week when Chinese and US officials said top negotiators would meet on Saturday and Sunday for their first talks since Trump unveiled his bombshell levies.
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will attend the meeting in Switzerland with Chinese Vice Premier He Lifeng.
The gathering has fueled hopes for a dialing down of tensions between the world’s economic superpowers, which has seen Washington impose levies of 145 percent on China and Beijing retaliate with 125 percent tolls of its own.
Meanwhile, Trump posted on his Truth Social platform that he would announce “a major trade deal with representatives of a big and highly respected country” at 10:00 am (1400 GMT) Thursday.
He did not say which country he was talking about but the New York Times and Politico cited multiple sources as saying it was Britain.
UK Prime Minister Keir Starmer said he would give an “update” later in the day.
The pound extended gains to spike at $1.3377 but later eased back to sit barely moved from the day before.
London was on the front foot in the morning, tracking gains in Tokyo, Hong Kong, Shanghai, Sydney, Seoul and Mumbai.
Paris and Frankfurt also enjoyed gains, while US futures were up.Singapore, Wellington, Manila, Bangkok and Jakarta fell, while Taipei was flat.
The White House’s hardball approach to trade continues to cause anxiety, and Federal Reserve boss Jerome Powell warned Wednesday that there was “a great deal of uncertainty” about where the administration’s policies will end up.
Trump’s moves have sent shivers through world markets, and fueled fears of a global recession and speculation of a reordering of the decades-old trading norms.
In a news conference after the Fed stood pat on interest rates, Powell said: “If the large increases in tariffs that have been announced are sustained they’re likely to generate a rise in inflation, a slowdown in economic growth and an increase in unemployment.”
The effects on inflation could be short-lived, reflecting a one-time shift in the price level,” he added, but also warned it was “possible that the inflationary effects could instead be more persistent”.
The Fed, in its post-meeting statement, said that “uncertainty about the economic outlook has increased further” and that the chances of higher unemployment and inflation had also risen.
Trump has in recent weeks hit out at Powell for not cutting rates quickly enough, and last month markets were roiled by fears he could try to oust him.
Analysts do not expect the central bank to move until July at the earliest.
”Recent job data, including last Friday’s non-farm payroll, indicate solid momentum, allowing the Fed to maintain its current stance,” said Tai Hui of JP Morgan Asset Management.”
With only one more set of job data expected before the June 17-18 meetings, the likelihood of a rate cut in June is low.”
The Fed aims to assert its independence amidst pressure from President Trump to reduce rates, requiring significant deterioration in hard data to justify a cut.” With AFP
