Solid GDP growth lifts index higher

By Iris Gonzales | The Philippine Star
May 12, 2023

MANILA, Philippines — Share prices continued on a upward trajectory yesterday as investors picked up stocks with strong first-quarter earnings, banking on their sustained recovery even as the Philippine economy grew at a slower pace during the first three months.

The 30-company benchmark Philippine Stock Exchange index (PSEi) finished at 6,675.46, up by 16.87 points or 0.25 percent, while the broader All Shares index rose by 5.38 points or 0.15 percent to close at 3,551.48.

Total value turnover reached P6.2 billion. Market breadth was negative, 98 to 66, while 62 issues were unchanged.

Claire Alviar of Philstocks Financial said the local bourse gained after the latest economic growth figures came in at 6.4 percent, falling within the government’s target of between six to seven percent, although slower than the eight percent pace recorded a year ago.

Meanwhile, stocks in Asia were mixed in choppy trading after a report showed evidence that inflation in the United States was cooling, even if it remains too high.

Concerns about the Chinese economy remain a major focus, especially for the Asian region, with the latest cause for worry coming from trade data released Tuesday.

“China could be heading into a deflationary funk similar to the one that Japan is starting to emerge from,” said Stephen Innes, managing partner at SPI Asset Management.

Bond prices climbed after the highly anticipated report said US inflation at the consumer level edged down to 4.9 percent last month, its lowest level in two years. That was slightly better than economists expected, and other underlying measures of inflation also came in very close to forecasts.

Because of that, Wall Street still sees the door open for the Federal Reserve to leave interest rates alone at its next meeting in June. That would be the first time it hasn’t raised rates at a meeting in more than a year, and a pause would offer some breathing room for the economy and financial markets.

“The concern coming in was that it would be hotter than feared,” said Ross Mayfield, investment strategy analyst at Baird. “While not exactly an exciting report, I think there was enough good news baked in that it shouldn’t impact the Fed or the economic trajectory all that much.”