PSEi slips on stagflation concerns, lingering economic pressures

MANILA, Philippines — Philippine stocks slipped on Wednesday as investors turned cautious after President Ferdinand Marcos Jr. warned about stagflation risks amid lingering economic pressures.

The benchmark Philippine Stock Exchange Index (PSEi) slipped by 0.06 percent or 3.40 points, to close at 5,893.40.

Luis Limlingan, head of sales at Regina Capital Development Corp., said investors remained on the sidelines as concerns over elevated oil prices and slowing growth continued to cloud market sentiment.

“The local market ended flat as investors stayed cautious after President Marcos flagged risks of stagflation amid lingering economic pressures,” Limlingan said.

READ: Is the Philippines headed toward stagflation?

Economists call the rare mix of rising prices and slowing economic activity “stagflation.” 

Normally, inflation accelerates when consumer demand is strong and the economy is growing. In this scenario, however, prices continue to climb even as economic demand softens.

Limlingan added that worries over higher oil prices caused by global supply chain disruptions further weighed on sentiment, fueling concerns about sticky inflation and slower economic activity.

Brokerage Philstocks Financial Inc. said the local bourse moved sideways before ending slightly lower, tracking Wall Street’s overnight decline following the rise in long-term United States Treasury yields.

Trading activity remained muted, with net value turnover settling at P5.65 billion, below levels usually seen during stronger market rallies.

Foreign investors were net sellers anew, recording net outflows of P115.32 million.

Sectoral performance was mixed during the session. The services sector led gains after rising 0.33 percent, while industrial counters posted the steepest decline at 0.79 percent.

Among index heavyweights, Ayala Land Inc. emerged as the top gainer, climbing 1.76 percent to P15 apiece.

Meanwhile, ACEN Corp. was the session’s biggest laggard after shedding 4.62 percent to close at P3.10 per share.

Analysts said investors remained on the sidelines as they monitored external developments, particularly movements in oil prices and global interest rates, which could affect inflation and economic growth prospects.

The cautious mood also mirrored concerns over the peso’s weakness and the potential impact of higher energy costs on corporate earnings and consumer spending. /atm