PH shares close lower

The local stock barometer ended a tad lower on Tuesday as investors digested the country’s latest economic report, which showed a strong year-on-year growth in the second quarter albeit coming from a low base last year at the peak of quarantine restrictions.

The main-share Philippine Stock Exchange index (PSEi) dipped by 9.34 points or 0.14 percent to close at 6,623.23 as investors looked outside the main index for buying opportunities.

The 11.8-percent year-on-year growth in second quarter gross domestic product (GDP)—which marked the country’s exit from five quarters of economic recession—was well in line with consensus expectations. However, there are concerns over the slowdown in economic momentum amid the reimposition of tough lockdown protocols.

“Investors still sold a bit, after discounting the [GDP] information and aligned with the sentiment overseas,” said Luis Gerardo Limlingan, managing director at local stock brokerage Regina Capital Development.

Nicholas Mapa, economist at ING Philippines, said that the second quarter growth had been largely driven by base effects.

“Despite the double-digit expansion on a year-on-year basis, economic momentum actually slowed in second quarter with GDP contracting 1.3 percent on a quarter-on-quarter basis after authorities reimposed tighter mobility restrictions in April,” Mapa said.

With firms forced to operate at partial capacity, he noted that domestic manufacturing activity contracted anew in April and May while business sentiment turned less optimistic over growth prospects in third quarter and 2022.

—Doris Dumlao-Abadilla INQ