Local stocks climbed for a third consecutive session Friday, Feb. 20, buoyed by the central bank’s recent pivot toward monetary easing and stabilizing currency.

The Philippine Stock Exchange index (PSEi) gained 57.97 points, or 0.90 percent, to finish at 6,465.12. Financial stocks led the broad-based rally as investors continued to price in the Bangko Sentral ng Pilipinas’ (BSP) decision to lower its policy rate, a move expected to stimulate lending and corporate earnings.

Market participation remained restrained despite the index’s upward trajectory. Total turnover reached ₱5.58 billion, with 872 million shares changing hands, a figure that remains below historical averages. Market breadth was positive, with 107 gainers outpacing 93 losers, while 64 issues remained unchanged.

Luis Limlingan, managing director at Regina Capital Development Corp., said the gains reflected the sustained positive reaction to the BSP’s policy shift.

He observed that while the benchmark spent much of the session trading within a narrow range as investors digested the implications of the rate cut, a late-session surge provided the momentum to lift the index into the green.

The momentum follows the BSP’s signal that it has room for further easing, provided inflationary pressures remain contained. Japhet Tantiangco, research manager at Philstocks Financial, noted that the local market’s advance was fundamentally driven by this transition in the central bank’s stance.

Lower interest rates typically reduce borrowing costs for listed firms and increase the relative attractiveness of equities over fixed-income assets.

The local rally was further supported by resilient currency. Rizal Commercial Banking Corp. Chief Economist Michael Ricafort said the PSEi’s three-day winning streak was reinforced by a relatively stronger peso, which has provided a sense of stability for foreign and domestic funds alike.

The Financials sector was the day's primary engine, while other sub-indices also showed resilience as the market looked past global volatility to focus on domestic policy tailwinds.

Analysts suggest that for the rally to sustain its momentum, the market will need to see a pickup in daily turnover, which currently suggests a degree of caution among larger institutional participants.