Stocks on edge as GDP slows

MANILA, Philippines — Trading is seen staying range bound this week as investors are expected to continue digesting the country’s gross domestic product (GDP) slowdown in the second quarter.

Following a three-day losing streak, the Philippine Stock Exchange index finished with a win last Friday at 6,290.35, up by 0.86 percent week-on-week.

While the local market managed to post gains in last week’s trading to snap a two-week losing streak, Philstocks Financial research manager Japhet Tantiangco said sentiment is seen to remain cautious moving forward amid the latest developments between the US and Iran.

He said the situation between the US and Iran remains uncertain as the two declare contradicting narratives.

“The former states that negotiations between the two for passage in the Strait of Hormuz are underway, while the latter is planning to block the former from transiting in the said strait,” Tantiangco said.

“The contradiction is fueling another rally for global oil prices which will have implications on local prices. If the situation between the two worsens, it is expected to weigh on the local bourse,” he said.

Tantiangco said latest macroeconomic data, especially on the country’s GDP, may also be a cause of concern for the market.

“Recent macroeconomic data are giving mixed clues. The Philippines’ inflation last July, both headline and core, have posted slower figures, though still elevated. June employment figures, in real terms, have posted an increase both month-on-month and year-on-year,” Tantiangco said.

“However, our Q2 GDP data has posted slower expansion implying that the local economy continues to lose growth momentum,” he said.

First Metro Investment Corp. head of research Cristina Ulang, meanwhile, believes the market has priced in all the bad news.

“Thus, forward upside is contingent on the Bangko Sentral ng Pilipinas dovish messaging ahead of the Monetary Board meeting this month given multi-year low 2Q26 GDP growth,” she said.

2TradeAsia.com, the online arm of F. Yap Securities Inc., for its part, expects BSP’s August call on interest rates and blue chip’s earnings to set the tone post-GDP repricing.

“We feel that the next two to three weeks are best used to position ahead of the BSP meeting rather than to hold a firm conviction on its outcome,” 2TradeAsia.com said.

“Overall, these keep our medium-term PSEi range capped at 6,200 to 6,500, with 6,500 acting as resistance until there is visible evidence that infrastructure disbursement is restarting,” it said.