PH stocks extend gains

The local stock index gained sharply on Wednesday as investors were emboldened by firm regional markets, a rosier local growth forecast and expectations of a further decline in special deposit account (SDA) rates by the Bangko Sentral ng Pilipinas.

Advancing for the second straight session, the main-share Philippine Stock Exchange index rallied by 83.62 points, or 1.24 percent, to close at 6,815.84.

This developed as the Asian Development Bank raised its domestic economic growth forecast for the Philippines to 6 percent from 5 percent. The multilateral lender also anticipated an increase in investment flows after the Philippine government recently bagged its first investment-grade rating from Fitch.

“Higher economic growth justifies higher prices,” said Joseph Roxas, president of local stockbrokerage Eagle Equities Inc., explaining the favorable impact of the growth upgrade on market psychology.

Meanwhile, a sharper-than-expected 15.6-percent contraction in February export earnings boosted expectations that the BSP would further cut interest rates on SDAs, the mechanism by which it borrows from the broader market, during the next policy rate-setting on April 25. A further cut in the rates, which have so far gone down by 100 basis points so far this year, is seen prompting yield-seeking investors to allocate more funds to equities.—Doris C. Dumlao