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Manila Bulletin devider Business devider The Stock Market devider Local stocks plunge to two-month low on BSP rate hike

Local stocks plunge to two-month low on BSP rate hike

Published Aug 27, 2026 05:22 pm
Equities market suffered a steep selloff, dragging the benchmark stock index to its lowest level in more than two months as investors dumped shares ahead of a rate increase by the Bangko Sentral ng Pilipinas (BSP) that was announced late in the trading day.
The Philippine Stock Exchange index (PSEi) dropped 132.65 points, or 2.16 percent, to finish at 6,004.58 on Thursday, Sept. 27.
Services led a broad decline across all industry sectors, while market breadth was sharply negative, with declining issues outnumbering advancers 126 to 55, and 54 stocks closing unchanged. Trading volume expanded to 1.08 billion shares with total turnover reaching ₱7.82 billion.
Selling pressure remained persistent throughout the trading session as market participants exercised extreme caution ahead of the central bank's policy announcement, according to Luis Limlingan, managing director at Regina Capital Development Corp.
The decision by the BSP to raise its overnight reverse repurchase rate by 25 basis points to five percent reinforced risk aversion among equity investors. The monetary tightening, combined with lingering geopolitical instability in the Middle East and projections of decelerating credit demand, continued to weigh heavily on local market sentiment.
Bearish momentum intensified following the official announcement of the rate increase, driven by widespread expectations that higher borrowing costs will further constrain national economic growth, said Japhet Tantiangco, research manager at Philstocks Financial.
The monetary policy decision follows earlier hesitation among investors who chose to lock in capital while awaiting clarity from the central bank.
Adding to equity market headwinds, local currency weakness pushed the peso to a record low against the US dollar.
The depreciation threatens to escalate import expenditures and broader inflationary pressure across the domestic economy, noted Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., compounding the economic challenges facing listed companies.

Related Tags

Philippine Stock Exchange Regina Capital Development Corporation Luis Limlingan Philstocks Financial Japhet Tantiangco Rizal Commercial Banking Corporation Michael L. Ricafort
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