PHILIPPINE SHARES extended their rally on Tuesday on positive market sentiment as the Bangko Sentral ng Pilipinas (BSP) chief reiterated that they could begin their easing cycle as early as next month.

The bellwether Philippine Stock Exchange index (PSEi) went up by 0.41% or 27.23 points to end at 6,556.66 on Tuesday, while the broader all shares index increased by 0.39% or 13.82 points to close at 3,538.24.

“The local market rose… as rate cut hopes were strengthened due to the dovish comments from Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr.… The rate cut narrative seems to boost investors’ confidence as many have been anticipating it since the start of the year,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

“This performance indicates that investors are optimistic about the BSP potentially implementing a rate cut this quarter, especially with inflation remaining within target. This price action reflects strong investor confidence in favorable upcoming monetary policy adjustments,” Seedbox Securities, Inc. Equity Sales Trader Moses Frando likewise said in a social media message.

On Monday, Mr. Remolona said the BSP should not “wait too long” to begin policy easing as this would dampen economic growth.

The BSP has kept its policy rate at a 17-year high of 6.5% for six straight meetings after it raised borrowing costs by a cumulative 450 basis points (bps) from May 2022 to October 2023 to help tame red-hot inflation.

The BSP chief said they are still “on track towards reducing rates” despite lingering risks to the inflation outlook. He earlier said that the central bank can cut by 25 bps in the third quarter, and by another 25 bps in the fourth quarter.

“Philippine shares resumed their climb as the market inched closer to the 6,600 level, getting a boost from the overnight performance of US markets. Stocks across the region have been bought up under the assumption that the US Federal Reserve could start cutting its benchmark interest rates soon,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan added in a Viber message.

Most sectoral indices rose on Tuesday. Holding firms climbed by 0.9% or 50.02 points to 5,579.54; property went up by 0.71% or 18.19 points to 2,567.95; services rose by 0.56% or 11.45 points to 2,029.61; and industrials increased by 0.53% or 49.04 points to 9,172.52.

Meanwhile, financials fell by 0.77% or 15.58 points to 2,003.30, and mining and oil dropped by 0.14% or 12.23 points to 8,595.76.

Value turnover climbed to P6.74 billion on Tuesday with 767.99 million shares changing hands from the P5.63 billion with 447.35 million issues traded on Monday.

Advancers outnumbered decliners, 97 to 90, while 56 names closed unchanged.

Net foreign selling stood at P16.77 million on Tuesday versus the P143.69 million in net buying recorded on Monday. — Sheldeen Joy Talavera