Philippine Shares Likely to Trade Sideways Amid Geopolitical Tensions and Mixed Economic Data

Philippine shares are expected to move sideways this week as investors remain cautious due to ongoing geopolitical tensions and mixed domestic economic indicators, with slower-than-anticipated growth dampening market outlooks. On Friday, the Philippine Stock Exchange index (PSEi) inched up by 0.2%, or 12.40 points, closing at 6,290.35. The broader all shares index also rose by 0.15%, or 4.95 points, ending at 3,418.40. Compared to the previous week’s close of 6,236.44 on July 31, the PSEi gained 53.91 points.

F. Yap Securities, Inc. noted that local equities managed a modest recovery, with mining and oil sectors leading gains due to improved gold and copper prices. The services sector also benefited from positive first-half earnings reported by International Container Terminal Services, Inc. (ICT). Conversely, property and financial sectors softened, influenced by July’s 6.2% inflation rate, which reinforced expectations for further interest rate hikes by the Bangko Sentral ng Pilipinas (BSP).

Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco highlighted that the local market snapped a two-week losing streak with last week’s gains. However, he cautioned that sentiment this week may remain subdued amid both external and domestic concerns. He pointed to recent developments between the United States and Iran as a source of uncertainty, alongside mixed macroeconomic data, particularly the latest gross domestic product (GDP) figures.

Tantiangco explained that recent economic data present mixed signals. While both headline and core inflation rates in July showed slower increases, they remain elevated. Employment figures for June improved on both a month-on-month and year-on-year basis. Despite these positives, the second-quarter GDP growth slowed to 2.3%, a significant drop from 5.4% in the same quarter last year and down from 2.8% in the first quarter of 2026. This slowdown suggests the Philippine economy is losing growth momentum. The first half of the year recorded 2.6% growth, falling short of the government’s full-year target range of 3.5% to 4.5%.

Technical indicators also suggest the PSEi is losing momentum. Tantiangco projected the index could trade between 6,150 and 6,400 points this week, reflecting a cautious market stance. F. Yap Securities added that investors might start positioning themselves ahead of the BSP’s policy meeting scheduled for August 27, given the mixed economic backdrop.

The securities firm indicated that while there is potential support for one more BSP rate hike in August, the softer economic growth argues for a shorter tightening cycle rather than skipping the hike altogether. They emphasized that the BSP will closely monitor the persistence of core inflation as a key factor influencing its decision. Their current forecast remains for another rate increase in August, although concerns about growth have shifted the balance more toward maintaining the status quo.

Additionally, F. Yap Securities noted that the upcoming Chinese “ghost month,” beginning August 13, could lead to thinner trading volumes, potentially affecting market liquidity and volatility during this period.