REUTERS

By Revin Mikhael D. Ochave, Reporter

PHILIPPINE shares could get a lift this week if the country secures a trade deal with the US ahead of the July 9 deadline on US tariff talks with its trade partners.

“The PSEi flirted anew to touch the 6,500 zone, although supply pressure emerged after a slight uptick in Philippine June inflation at 1.4%,” online brokerage 2TradeAsia.com said in a market note.

Positive developments ahead of the tariff deadline could buoy investor sentiment, Japhet Louis O. Tantiangco, research manager at Philstocks Financial, Inc., said.

“An established trade deal between the US and the Philippines or an extension of the negotiation deadline may give the market a boost,” he said in a Viber message. “Market sentiment will be cautious next week as investors await a trade deal.”

On Friday, the Philippine Stock Exchange Index (PSEi) fell 1.13% or 73.41 points to close at 6,395.57, while the broader all-share index dropped 1.01% or 38.62 points to 3,764.71. Week-on-week, the PSEi dipped by 0.2% or 12.7 points.

US President Donald J. Trump on July 4 said he had signed letters to 12 countries containing proposed tariff levels, which would be delivered as “take it or leave it” offers. He did not name the countries.

In April, the US paused its planned reciprocal tariffs for 90 days, with the deadline set for July 9. A blanket 10% tariff remains in effect, but Mr. Trump had warned that duties could go as high as 70%, with most tariffs taking effect on Aug. 1.

Mr. Tantiangco said prospects of further easing by the Bangko Sentral ng Pilipinas (BSP) could support the market after softer inflation in June.

The Philippine Statistics Authority reported that inflation rose to 1.4% in June from 1.3% in May due to higher prices in utilities and the education sector. The rate was still below the 3.7% in June 2024 and the central bank’s 1.1% to 1.9% forecast.

BSP Governor Eli M. Remolona, Jr. has hinted of two more policy rate cuts this year as inflation remains tame. In May, the BSP lowered its target reverse repurchase rate by 25 basis points to 5.25% amid an easing inflation outlook and weaker-than-expected first-quarter economic growth.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., in an e-mail put the PSEi’s immediate major support at 6,105 to 6,200 and resistance at 6,500.

2TradeAsia.com placed immediate support at 6,300 and resistance at 6,500 to 6,550.

“While a broad re-rating is still constrained by global uncertainty, we underscore that local fundamentals have since been more constructive relative to global peers,” the brokerage said.

“The ongoing BSP easing, while mitigating local borrowing costs, also highlights potential carry opportunities for foreign capital into Philippine securities, which could spill over into high-quality equities,” it added.

It said the best way to find strong investment opportunities is by analyzing individual companies. However, because the cost of borrowing is changing and the economy is growing cautiously, it might make sense to slowly start buying stocks.

Mr. Tantiangco said the PSEi might continue to test the 6,400 level.

“Chart-wise, the local market closed last week below the 6,400 line after failing to hold above its 200-day exponential moving average (EMA),” he said.

This shows that the market is still struggling to rise past a key level, he said, adding that it might try again to go above 6,400. If it fails, it could drop further to the next level where it might find support.