Stocks drop as September inflation heats up

Manila, Philippines — The Philippine stock market experienced a sharp decline on Monday amid rising inflation concerns. The Philippine Stock Exchange index (PSEi) fell by 1.15 percent, or 66.09 points, settling at 5,677.12 points. The broader All Shares index also dipped by 0.86 percent, closing at 3,170.73 points. RCBC chief economist Michael Ricafort attributed the market's decline to the unexpectedly high September inflation rate of 7.2 percent, the steepest in three years since March 2023.

Ricafort warned that this could prompt the Bangko Sentral ng Pilipinas to implement additional interest rate hikes to curb inflation and manage inflation expectations, potentially raising borrowing costs for listed companies. "Investors quickly cashed in gains after the market fell below the 5,700 level, recouping some of the previous day's gains," said COL Financial Group research analyst Denise Joaquin.

"Inflation figures exceeding expectations, at 7.2 percent from 6.1 percent in August, further weighed on market sentiment." Sectors across the board suffered, with the mining and oil index plummeting by 2.38 percent. Trading activity was robust, with total value turnover reaching P5.46 billion, up from P3.74 billion the prior day.

However, market breadth remained negative, with 120 stocks falling and 73 advancing, and 69 remaining unchanged. ICTSI led the session with a 1.66 percent drop to P890 per share, while BDO Unibank remained flat at P110.50 and Ayala Corp. rose by 0.95 percent to P530.