PHILIPPINE SHARES declined on Monday ahead of the Bangko Sentral ng Pilipinas’ (BSP) monetary policy meeting this week, where the market expects a pause in rate hikes.

The benchmark Philippine Stock Exchange index (PSEi) fell by 55 points or 0.83% to close at 6,523.15 on Monday, while the broader all shares index went down by 19.85 points or 0.56% to 3,491.10.

“Shares on the Philippine Stock Exchange started off the week on a cautious note as investors await the Philippine central bank’s interest rate decision. It is widely expected to maintain the key benchmark interest rate at 6.25% on Thursday amid easing inflation and slowing economic growth,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

“The lagged effects of the central bank’s cumulative rate increases will be fully felt this year, as the impact of policy tightening is usually seen in 12 months. Hence, the central bank may want to keep interest rates at a level supportive to economic growth to help reach the government’s 6-7% target this year,” Mr. Arce said.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan likewise said in a Viber message that investors are looking ahead to the BSP’s rate decision.

“Philippine shares plunged steeply as concerns around US economy resurfaced and dampened investor sentiment,” Mr. Limlingan added.

The BSP is widely expected to keep its benchmark interest rates unchanged on Thursday amid easing inflation and slowing economic growth.

A BusinessWorld poll last week showed 13 out of 18 analysts see the Monetary Board pausing its rate hike cycle at its May 18 review.

If realized, this would be the first time the BSP will leave interest rates unchanged since it began hiking in May 2022.

Meanwhile, five economists see the central bank raising borrowing costs by 25 basis points (bps) for a third straight meeting and to pause starting from its June 22 review.

The central bank has raised benchmark interest rates by 425 bps since May 2022 to help bring down elevated inflation, bringing its policy rate to a 16-year high of 6.25%.

All sectoral indices declined on Monday, except for mining and oil, which rose by 46.09 points or 0.44% to 10,337.44.

Meanwhile, property dropped by 31.76 points or 1.17% to 2,683.39; services declined by 15.88 points or 1.01% to 1,553.50; holding firms fell by 49.15 points or 0.75% to 6,487.80; industrials decreased by 62.22 points or 0.65% to 9,375.75; and financials went down by 9.41 points or 0.5% to 1,842.26.

Value turnover fell to P4.14 billion on Monday with 1.65 billion shares changing hands from the P5.51 billion with 610.93 million issues traded on Friday.

Decliners outnumbered advancers, 106 versus 86, while 42 names closed unchanged.

Net foreign selling stood at P7.64 million on Monday versus the P63.43 million in net buying recorded on Friday. — A.H. Halili