PSEi bucks global downturn as GDP beats forecasts

MANILA, Philippines — A better-than-expected economic performance in 2021 provided the lift in Philippine stock trading yesterday, bucking the downtrend in global markets as the US central bank turned hawkish.

The benchmark Philippine Stock Exchange index (PSEi) gained 19.91 points or 0.27 percent to close at 7,273.52 while the broader All Shares index went up by 5.38 points or 0.14 percent to finish at 3,861.49.

Total value turnover reached P6.25 billion. Market breadth, however, was negative with 102 decliners against 74 gainers, while 62 issues were unchanged.

“The Philippine market defied the global drop in equities after the release of (gross domestic product) GDP figures which showed that the Philippine economy grew by 7.7 percent in Q4 of 2021, better than the 6.3 percent growth expected by most analysts,” AB Capital Securities said in a commentary.

Full-year GDP growth came in at 5.6 percent, also above the government target of five to 5.5 percent.

In Asia, most emerging markets ended lower after the US Federal Reserve signaled it is ready to kick off a round of monetary policy tightening to tame inflation.

In its latest policy update, the Fed said it is likely to hike interest rates in March and reaffirmed plans to end its bond purchases in March.

Central banks in Asia have not been pressured to pursue interest rate hikes as aggressively as their peers in Europe and Latin America. However, the prospect of higher US interest rates have left regional policymakers balancing the need to protect economic recovery while stemming potential outflows that could weaken current account surpluses.

“With the somewhat hawkish signals by the Fed ... there may be greater pressure for central banks in the region to act on curbing inflationary pressures as well,” Yeap Jun Rong, market strategist at IG, said in a note.