Philippine shares closed marginally higher on Tuesday despite a better-than-expected July inflation rate.
The main-share Philippine Stock Exchange index inched up by 4.98 points, or 0.08 percent, to close at 6,353.63. The broader all shares index advanced by 4.34 points, or 0.12 percent, to 3,770.94.
The peso slipped to 57.63 to the US dollar on Tuesday from 57.29 on Monday.
The Philippine Statistics Authority (PSA) reported that the inflation rate eased to 0.9 percent in July from 1.4 percent in June. Core inflation, however, picked up slightly to 2.3 percent from 2.2 percent.
Year-to-date, average inflation stands at 1.7 percent, which is below the government’s target range of 2 percent to 4 percent.
Bank of the Philippine Islands lead economist Emilio Neri Jr. said headline inflation continues to reflect the decline in food prices, particularly rice.
“Inflation is expected to remain subdued in the coming months due to lower rice prices,” Neri said.
“However, the impact of favorable base effects may begin to fade by September, and inflation could move closer to 3 percent by year-end.”
Neri noted that the benign inflation and “dovish signals” from the Bangko Sentral ng Pilipinas make a rate cut in August “highly probable.”
The property sector led all sectors, increasing by 1.02 percent. Services and mining and oil also saw gains, rising by 0.95 percent and 0.93 percent, respectively.
Value turnover was thin at P4.53 billion. Market breadth was positive, with 93 gainers versus 86 decliners, while 67 stocks were unchanged.
Shares of SM Prime Holdings Inc. rose 1.67 percent to P24.40 on positive prospects for the second half of the year after the company registered all-time high first-half results. Conversely, the stock price of Metropolitan Bank & Trust Co. slipped by 2.15 percent to P72.90.
