PHILIPPINE shares retreated on Tuesday after a single-day rebound as the market fretted over a potential downward revision to the growth forecasts this year for the economy by the International Monetary Fund (IMF) and other investment banks.
The Philippine Stock Exchange index (PSEi) fell 1.54 percent or 118.41 points to close at 7,551.96, while the All-Shares index dropped 1.13 percent or 49.51 points to 4,347.86.
Astro del Castillo, First Grade Finance Inc. managing director, said concern over a possible downgrade of projections for the Philippine economy for the whole year following the slowdown in first-quarter GDP growth weighed on trading.
GDP grew 5.2 percent in the first three months of 2015, failing expectations by economists for a rate of at least 6 percent, and an earlier forecast by the IMF for 7.3 percent for the period. It also showed a loss of momentum from the revised 6.6 percent growth in the preceding quarter and the 5.6 percent rise posted a year earlier.
“The number one reason is that investors were concerned over the continuous downgrade by select institutions of the [PH] GDP, especially the IMF . . . People are influenced by the possible downgrade of our GDP outlook by various institutions,” del Castillo said.
The IMF said after the “significant negative surprise in the first-quarter” figures, it would review its 2015 outlook for the Philippines for its next World Economic Outlook (WEO) forecast.
A Metrobank Research note also forecast the country’s GDP may weaken further due to the impact of El Niño, which could pressure agricultural output and raise consumer prices in the second half of the year.
“We’ll keep an eye on inflation. If it turns out to be manageable, then the market may be [trading]on the upside. But for now, shares might hover around the 7,500 to 7,600 levels,” del Castillo said.
The official inflation data for May is scheduled for release on June 5.
The sectoral declines were led by the industrial and holding firms, losing 1.76 percent and
1.75 percent, respectively. Mining and oil was the only sector that ended in positive territory, posting a 0.97 percent gain.
The most actively traded shares posted losses: Universal Robina Corp., Ayala Land Inc., GT Capital Holdings Inc., Ayala Corp., BDO Unibank Inc., JG Summit Holdings Inc., Philippine Long Distance Telephone Company, Jollibee Foods Corp., Robinsons Retail Holdings Inc., and SM Prime Holdings Inc.
Total volume stood at 509.99 million shares, valued at P7.67 billion. Decliners outnumbered advancers 107 to 68, while 46 issues closed unchanged.
On Monday, the benchmark stock index gained 89.91 points or 1.19 percent to finish at 7,670.37, while the wider All-Shares index added 36.56 points or 0.84 percent to 4,397.37.