Stocks falter on hawkish BSP tone

Philippine shares eased on Tuesday as the Bangko Sentral ng Pilipinas (BSP) acknowledged anew the rising threat of inflation, leaving investors to weigh the impact of eventual monetary tightening in the coming months.

The benchmark Philippine Stock Exchange index sank by 0.27 percent or 19.27 points to 7,115.09 while the broader all-shares index shed 0.30 percent or 11.52 points to 3,770.53.

This followed comments from BSP Governor Benjamin Diokno that high inflation was “back with a vengeance,” although he tempered the view by stating it was more manageable in the Philippines compared with some other countries.

In a separate commentary, Fitch Solutions said it expected the BSP to hike its policy rate by 75 basis points to 2.75 percent by the end of the year. It also raised its average 2022 inflation forecast to 4.5 percent from 3.7 percent. This was above the BSP’s target range of 2-4 percent.

“We expect a combination of rising inflationary pressures, continued economic recovery and rising interest rates around the world to prompt the BSP to tighten its monetary policy over the coming months,” Fitch Solutions said.

Local subsectors were mostly lower, save for industrial and financials, which rose by 0.46 percent and 0.26 percent, respectively.

Meanwhile, trading volume fell from the previous day, with 788.02 million shares valued at P4.87 billion changing hands. A total of 92 companies declined while 82 gained and 57 closed unchanged.

Ayala Land Inc. was the most actively traded company as it dropped by 2.08 percent to P35.25 per share.

It was followed by International Container Terminal Services Inc., down 0.92 percent to P216; Ayala Corp., down 2.48 percent to P786; AC Energy Corp, up 0.12 percent to P8.39; and Converge ICT Solutions Inc., up 2.46 percent to P29.20 per share.

Other active names were: SM Investments Corp., down 0.44 percent to P896; BDO Unibank Inc., up 0.3 percent to P132; SM Prime Holdings Inc., up 1.2 percent to P37.95; PLDT Inc., down 1.55 percent to P1,841 and Solar Philippines Nueva Ecija Corp., up 0.5 percent to P2.03 per share. INQ