The local stock barometer climbed close to the 6,600 mark on Tuesday, rising for the second straight session, as investors welcomed signs of easing consumer price pressures.
The main-share Philippine Stock Exchange index (PSEi) racked up 94.96 points, or 1.46 percent, to close at 6,590.11, supported by domestic investors while foreigners continued to unload local equities.
Luis Gerardo Limlingan, managing director at Regina Capital Development, said investors had drawn optimism from another round of upbeat economic news from the services sector in the United States and the Philippine inflation rate for March, which eased to 4.5 percent while core inflation remained at 3.5 percent. This marked a slowdown from the two-year high of 4.7 percent recorded in February, thanks to the deceleration of food prices.
“The price freeze on meat items coupled with the harvest seasons helped food inflation slow, offsetting faster inflation noted in transport,” said ING Philippines economist Nicholas Mapa.
Mapa noted that food inflation, which accounted for nearly 36 percent of the total consumer price index basket, slowed to 5.8 percent from 6.7 percent in the previous month with notable decline in the prices of meat, fish, vegetables and fruits.
Transport costs continued to pick up while other services also accelerated costs associated with the ongoing pandemic, such as personal protective equipment and takeout surcharge, pushing up headline inflation, Mapa noted.
“Meanwhile, signs of weak domestic demand continue to manifest with the recreation and culture component posting deflation for a ninth straight month with Filipinos likely cutting back on luxuries given the recession,” Mapa said.
“Although it may be too early to deem the March 4.5 percent inflation the peak for the year, we do note that the likelihood of inflation hitting 5 percent now is diminishing somewhat,” he added.
At the stock market, all counters ended in the green, led by the holding firm counter, which rose by 2 percent, while the industrial and mining/oil counters both climbed by over 1 percent.