Stocks rally as rate-cut hopes, growth outlook align
Published Jan 15, 2026 04:47 pm
The Philippine Stock Exchange index (PSEi) rebounded sharply on Thursday, Jan. 15, as investors bet on looming interest rate reduction by the central bank and digested an optimistic medium-term growth outlook from the World Bank.
The main index climbed 97.72 points, or 1.53 percent, to finish at 6,487.53. The rally snapped a two-day losing streak, fueled by renewed bargain hunting as market participants looked past a recent pullback.
Trading activity intensified with 2.02 billion shares changing hands, valued at ₱7.29 billion. Advancers led decliners 115 to 96, while 58 issues remained unchanged.
Optimism was underpinned by a World Bank report projecting the Philippine economy will maintain an expansion rate above five percent through 2027. This macroeconomic backdrop provided a catalyst for the services sector, which spearheaded the advance.
Conversely, the mining sub-index bucked the trend, closing lower as investors locked in profits following recent gains.
“The PSEi ended higher after closing lower in the past two trading days,” said Luis Limlingan, managing director at Regina Capital Development Corp. “Buying pressure was renewed as investors engaged in bargain hunting following the recent pullback of the index.”
Market sentiment was further buoyed by expectations that the Bangko Sentral ng Pilipinas will continue its easing cycle. Analysts suggested that the prospect of lower borrowing costs is encouraging a return to risk assets.
Japhet Tantiangco, research manager at Philstocks Financial, noted that buying was supported by hopes for a rate cut at the next policy meeting, alongside expectations that the domestic economy is poised to regain its rapid growth momentum.
Foreign investors provided additional tailwinds to the rally, recording net inflows of ₱1.31 billion for the session. This marked a shift in participation as offshore funds repositioned ahead of central bank decisions.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the market is specifically pricing in a 25-basis-point rate cut in February 2026.
He added that recent dovish rhetoric from BSP Governor Eli Remolona Jr. suggests more aggressive monetary support could be on the horizon.
This includes a potential reduction in the reserve requirement ratio for large banks to approximately two percent within the next year, down from the current five percent, a move that would inject significant liquidity into the financial system.