The Philippine Stock Exchange index (PSEi) rose for a second consecutive session as investors weighed record-low underemployment data against shifting expectations for global and local interest rate paths.

The benchmark PSEi gained 8.87 points, or 0.1 percent, to close at 6,390.91 on the last trading day of the week, erasing the market's remaining losses stemming from the political volatility.

While the index remains below its mid-January peak of 6,494.10, the steady performance above the 6,000 level for nearly two months suggests a firming floor for local equities.

Michael L. Ricafort, Rizal Commercial Banking Corp. (RCBC) chief economist, said sentiment was bolstered by domestic labor data showing an underemployment rate of eight percent, the lowest since the current series of records began in the early 1990s.

The figures, coupled with sustained growth in manufacturing production, provided a fundamental cushion even as the market looks toward a potential pivot in monetary policy, Ricafort said.

The peso also strengthened, gaining 0.2 percent to close at 58.585 per United States (US) dollar, the local currency's strongest finish since mid-December.

The appreciation comes as the Bangko Sentral ng Pilipinas signaled that its current easing cycle may be reaching its conclusion. Traders are now pricing in a final 25-basis-point rate cut at the central bank’s upcoming meeting on Feb. 19.

External factors provided further tailwinds. In the US, a surge in January job cuts led to increased speculation that the Federal Reserve may accelerate rate reductions in the second half of 2026.

Market participants are also monitoring the nomination of Kevin Warsh as the next US Federal Reserve chairman. Despite Warsh’s reputation as a policy hawk, some analysts suggested he may ultimately favor lower rates to align with the current administration's economic priorities.

The index faces immediate resistance between the 6,400 and 6,500 levels, with a secondary target at the May 2025 high of 6,591.94. Support is expected to hold within the 6,145 to 6,280 range.