Philippine shares fall as weak GDP data heighten economic concerns

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Philippine shares fall on GDP concerns

Highlights

Philippine Stock Exchange index drops 1.46% to 5,677.92 after GDP grows only 2.1% in Q3, below expectations and target.
Headline inflation surges to 7.8% in October, its highest in nearly four years, sustaining pressure for potential Bangko Sentral ng Pilipinas rate hikes.
Five of six sectoral indices close lower, value turnover shrinks to P5.98 billion, and net foreign selling reaches P233.95 million, reversing prior net buying.

Market decline follows weaker growth reading

As reported by BusinessWorld Online, the Philippine Stock Exchange index, or PSEi, drops by 1.46% or 84.03 points to 5,677.92 on Monday, while the broader all shares index falls by 1.08% or 34.79 points to 3,183.52. The benchmark opens higher at 5,771.58 and reaches an intraday peak of 5,785.13, but fails to hold gains and finishes at its lowest level for the session.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan says investors react to a weaker-than-expected GDP print, raising concerns over the country’s growth prospects. He adds that sentiment remains fragile amid potential El Niño risks and persistent inflationary pressures, which could further weigh on domestic demand and economic activity.

Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco likewise says the local bourse plunges as investors digest the latest GDP data. He says worries over the economic outlook, elevated inflation, and the possibility of another Bangko Sentral ng Pilipinas rate hike also weigh on the market.

Inflation and sector losses weigh on sentiment

Government data show Philippine GDP expands by 2.1% year on year in the July-to-September period, slowing from 4% in the same period last year and the revised 2.4% growth in the second quarter. The result is below the median 2.7% estimate in a BusinessWorld poll and brings the nine-month average to 2.5%, below the government’s 3.5% to 4.5% full-year target.

Headline inflation reaches a near four-year high of 7.8% in October, marking the eighth straight month above the central bank’s 3% target and pushing the year-to-date average to 5.6%. The combination of slower growth and elevated prices keeps pressure on investor sentiment and reinforces concerns over tighter monetary policy.

Five of the six sectoral indices close lower, led by property, which declines by 2.07%, followed by holding firms, industrials, services, and financials. Mining and oil is the lone gainer, rising 2.34%. Decliners outnumber advancers, 100 to 74, with 69 issues unchanged, while value turnover slips to P5.98 billion and net foreign selling stands at P233.95 million, reversing Friday’s P981.81 million in net buying.

Our earlier report on Philippine sovereign bond market reforms outlined plans to modernize pricing conventions and pursue inclusion in a major emerging-market bond index, with the aim of improving liquidity and broadening the investor base. It also noted that these steps alone may not translate into stronger real-economy investment unless they are backed by fiscal credibility, deeper domestic capital markets, and wider structural reforms that support productivity and business financing.

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