The main equity index on Tuesday rose to its highest level in more than two weeks, again breaching the 5,000-level after credit watchers raised the Philippines debt rating outlook to “positive.”
This indicated the country’s likely upgrade to “investment” grade from “junk” status, owing largely to the plugging of tax loopholes under the Aquino administration.
The benchmark Philippine Stock Exchange Index (PSEi) rose 1.4 percent, or 70.37 points, to 5,023.11—the highest level since May 14.
Advancers, at 109, outnumbered the 43 decliners by more than two to one, while 45 issues were unchanged.
“The local bourse rallied back up to the 5,000 levels after Moody’s raised the Philippine outlook from stable to positive,” a local brokerage firm said in a daily note. Debt watcher Standard & Poor’s also has a “positive” outlook for the Philippines, which signals a possible adjustment to investment grade in the next 12 months.
An upgrade would bring the Philippines up to investment grade status—a first in the country’s history. The upgrade is expected to make the Philippines a more attractive investment location for fund managers looking for safe bets.
Holding firms led the rise, advancing 2.39 percent. The only laggard was the services sub-sector, which lost 0.86 percent. Volume was modest at 1.2 billion shares changing hands at P5.25 billion.—Paolo G. Montecillo