PH investors tiptoe while banking on inflation slowing

Philippine stocks would likely trade sideways ahead of the release of inflation data on Wednesday that could confirm that consumer prices had peaked and were on a downtrend.

The benchmark Philippine Stock Exchange index (PSEi) slipped 1.02 percent to 6,499.68 the previous week while the broader All Shares index added 0.9 percent to 3,493.37, data from the stock exchange showed.

The government is expected to release March inflation data on April 5.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., estimated that inflation reached 8 percent in March.

This would be lower than the 8.6-percent rise in February, the first time prices slowed in six months.

“Some agricultural/food prices already started to ease recently on better weather conditions that led to some planting/increase in supply that helps in lowering food prices (which has the largest weight in the inflation basket at nearly 40 percent), after some storm damage in the latter part of 2022 up to early 2023, especially the shear line that hit some parts of the Visayas and Mindanao,” Ricafort explained.

However, he pointed to upside price risks coming from rice, water and electricity rates.

“Nevertheless, there is a chance that year-on-year inflation could have already topped out/reached the peak in [first quarter] 2023 (particularly the 8.7 percent in January 2023) and could start to ease gradually thereafter,” he said.

For the PSEi, Ricafort pegged the immediate support level at 6,420 while 6,730 to 6,830 would be the major resistance area. INQ