Philippine Stocks Face Continued Pressure Amid Corruption Concerns
Philippine equities are expected to remain under pressure this week as ongoing corruption probes and currency concerns weigh heavily on investor sentiment.
Market Performance Last Week
On Friday, the Philippine Stock Exchange index (PSEi) dropped 0.25% or 15.16 points, closing at 6,027.12, its lowest level in nearly six months. The broader All Shares index also slipped, losing 0.23% or 8.7 points to end at 3,644.80.
Week-on-week, the PSEi recorded a 237.37-point decline from its Sept. 19 close of 6,264.49, marking five straight sessions of losses.
Corruption Concerns and Market Sentiment
According to 2TradeAsia.com, last week’s pullback followed earlier gains but was overshadowed by heightened political uncertainties. These stem from investigations into alleged irregularities in flood control projects.
Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco noted that the market has been forming new lows, at one point dipping below the 6,000 level. He explained that corruption issues, combined with the peso’s weakening against the US dollar, continue to drag sentiment.
DOJ and NBI Updates
On Friday, the Department of Justice (DOJ) announced that the National Bureau of Investigation (NBI) had recommended the prosecution of 21 individuals. The list reportedly includes lawmakers and officials from the Department of Public Works and Highways (DPWH), all linked to alleged anomalous infrastructure projects.
The announcement reinforced investor concerns that political instability could weigh on economic confidence and delay infrastructure spending.
Peso Movement Adds Pressure
The Philippine peso closed Friday unchanged at P58.10 per dollar, with traders citing corruption issues and reduced expectations of further US Federal Reserve rate cuts following stronger-than-expected U.S. economic data. The peso’s recent volatility has been another headwind for the equities market, given its potential impact on import costs and foreign debt servicing.
Outlook for the Week
Mr. Tantiangco said some bargain hunting may emerge after the PSEi’s five-day losing streak, though he cautioned that a strong rally is unlikely without a clear positive catalyst. He added that investors will continue monitoring corruption probes and foreign exchange movements.
“Investors may also take cues from the movement of other relevant markets. The peso’s direction may still play a significant role in the market’s movement, with further depreciation causing a market decline and an appreciation causing a market rebound,” he said.
The market will also react to key economic indicators. These include U.S. consumer spending and personal consumption expenditures (PCE) price index data, which were released last Friday, and the S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) report scheduled this week.
Technical Analysis
From a technical standpoint, analysts said the market remains on a downtrend. Last week, the PSEi failed to stay above its 50-day exponential moving average (EMA), which continues to act as a resistance level.
Still, the market has managed to hold above 6,000, which analysts identify as a key support zone. According to 2TradeAsia.com, immediate support is at 6,000, with secondary support at 5,800, while resistance is pegged between 6,150 and 6,200.
Volatility Ahead
Analysts cautioned that volatility will likely persist. Without a strong catalyst to reverse sentiment, investors may remain cautious until clarity emerges on both the political and economic fronts.
For now, the Philippine stock market faces a challenging environment, shaped by a combination of corruption concerns, currency weakness, and external economic factors.