MANILA - The sustained deceleration of the country’s inflation rate, which further dropped to 5.1 percent in December from month-ago’s 6 percent, is seen to give the Philippine Stock Exchange index an upward boost this shortened trading week.
Average inflation in 2018 stood at 5.2 percent, in line with the expectations of the Bangko Sentral ng Pilipinas but higher than the government’s 2 to 4 percent target band from 2018-2020.
At the end of yesterday’s morning session, the main stocks gauge increased by 1.57 percent, or 120.90 points, to 7,801.50 points.
Regina Capital managing director Luis Limlingan told the Philippine News Agency that “it seems” that the inflation report will be a big plus for the local equities during the day. “Yes, I think it will close upward,” he said.
PSEi started the year with gains amid concerns on the path of global growth, which has resulted in continued volatilities overseas.
Limlingan said risks on the PSEi continue to remain from the external side. “Growth outside slowing down and sentiment may drag us,” he added.
The main gauge ended 2018 at 7,466.02 points, down from the 7,482.66 points in the previous trading, which in turn was caused by the continued volatilities in global market.
Analysts expect the continued see-saw results of equities markets globally, given the developments in major economies on trade and growth issues.
The government’s economic managers, meanwhile, vowed to continue working towards further reining in the prices of commodities, even as the country’s inflation rate has already declined to a seven-month low.
“Nonetheless, we continue to exert all efforts to bring inflation within the government’s target range of 2 to 4 percent, and ensure price stability all year round. While we can say that the worst seems over given the signs of easing price pressures, we continue to be vigilant of possible risks,” they said in a statement.
The National Economic and Development Authority, Department of Finance, and the Department of Budget and Management noted that ensuring sufficient supply of rice and other major agricultural products from local sources remains crucial over the near term, especially with the looming El Niño phenomenon this year.*PNA
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