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Manila Bulletin devider Business devider The Stock Market devider PSEi rallies as low inflation rate seen leading to BSP rate cut

PSEi rallies as low inflation rate seen leading to BSP rate cut

Published Jan 6, 2026 04:56 pm
The Philippine Stock Exchange index (PSEi) rose substantially in reaction to the low December inflation rate of 1.8 percent, which opens the door for an interest rate cut by the Bangko Sentral ng Pilipinas (BSP) in February.
The benchmark index surged by 153.38 points, or 2.49 percent, to close at 6,317.91. The services sector led the rally across the board.
Volume grew to a hefty 1.34 billion shares worth ₱8.31 billion. Gainers beat losers—141 to 72, with 50 unchanged.
“The PSEi climbed sharply as strong buying interest prevailed after the release of inflation figures which still fall below the BSP’s range,” said Regina Capital Development Corp. managing director Luis Limlingan, referring to the central bank’s target of two- to four-percent manageable inflation.
He added that, “Investor sentiment was supported by BSP Governor [Eli M. Remolona Jr.’s] signals that another rate cut remains possible in February should economic growth fall short of expectations.”
Sentiment was also buoyed by gains in Wall Street as strong gains in financial stocks pushed the Dow to a record high while energy shares jumped after a United States (US) military strike targeting Venezuelan President Nicolas Maduro fueled expectations of improved US access to Venezuela’s oil reserves.
Philstocks Financial Inc. research manager Japhet Tantiangco said the local market rallied further as investors continued to hunt for bargains, with optimism fueled by the December inflation print, which remained under control.
“The subdued inflation print gives the BSP room to ease monetary policy further if needed. The positive cues from Wall Street’s performance also helped in today’s session,” he added.
Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the PSEi gained for the third straight trading day of 2026, after the latest dovish signals from Remolona that another 0.25-percent BSP rate cut is on the table in February.
He noted that the latest local inflation data remains relatively benign and below the BSP’s target range for the 10th-straight month, and this could still support future BSP rate cuts.

Related Tags

Philippine Stock Exchange index Regina Capital Development Corporation Luis Limlingan Philstocks Financial Rizal Commercial Banking Corporation
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