By Arra B. Francia, Senior Reporter

SHARES plunged on Thursday after disappointing economic growth figures in the first quarter.

The benchmark Philippine Stock Exchange index (PSEi) fell 2.15% or 171.07 points to close at 7,755.65 yesterday, retreating sharply from its 7,900 finish in the previous session. The broader all-shares index slumped 1.41% or 69.13 points to 4,807.85.

“Market was down by more than 100 points today as 5.6% GDP (gross domestic product) was lower than estimate of 6% and impending tariff application on China which may further slowdown the global economy,” Diversified Securities Inc. Equity Trader Aniceto K. Pangan said in a text message on Thursday.

The Philippine Statistics Authority reported Thursday that the economy grew by 5.6% in the January to March period, much lower than the previous quarter’s 6.3% and the 6.5% seen in the first quarter of 2018. This is also lower than the 6.1% median estimate based on a BusinessWorld poll of 20 economists last week.

The result is also well below the government’s downward-revised target of 6-7% from 7-8% before, due to the delayed approval of the P3.7-trillion 2019 national budget.

The disappointing GDP result was further worsened by US President Donald J. Trump’s looming implementation of a tariff hike on $200 billion worth of Chinese goods this Friday.

Papa Securities Corp. Sales Associate Gabriel Jose F. Perez also attributed the PSEi’s decline to the lower-than-expected GDP results, adding that this may have pushed the Bangko Sentral ng Pilipinas (BSP) to cut key interest rates during its policy meeting yesterday afternoon.

“In the afternoon, the BSP did indeed cut policy rates by 25 bps (basis points), possibly to spur growth following the disappointing GDP figure,” Mr. Perez said in an e-mail.

The BSP reduced benchmark interest rates by 25 bps in a policy meeting after the market’s close, placing the key rate at 4.5%. The move came after five consecutive rate hikes totaling 175 bps in 2018 as inflation surged. Inflation has since slowed down for six straight months, bringing the year-to-date average at 3.6%.

Sectoral indices bled, with financials leading the decline at 2.81% or 49.74 points to 1,718.56. Holding firms plummeted 2.7% or 205.95 points to 7,414.27; mining and oil slumped 1.37% or 104 points to 7,466.08; property went down 1.34% or 56.01 points to 4,118.74; industrials gave up 1.29% or 150.61 points to 11,504.40, while services dipped 0.45% or 7.41 points to 1,606.32.

Turnover climbed to P9.15 billion after some 663.77 million issues switched hands, higher than the previous session’s P7.12 billion.

Net foreign selling swelled to P1.63 billion, more than four times the P360.93-million net outflow recorded on Wednesday.

Decliners outpaced advancers, 109 to 88, while 43 names were unchanged.

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