Philippine stock woes mount as 2018 losses pass $20-billion mark
PHILIPPINE stocks, already the world’s worst performers this year, fell to the lowest in almost a year Tuesday, bringing to more than $ 20 billion the loss in market value for the country’s benchmark index since the start of 2018.
The Philippine Stock Exchange Index dropped as much as 2.3% in Manila trading, on track for its lowest close since May 2017, with five stocks falling for each that gained. The gauge has lost almost 10% since the end of 2017 as rising inflation, Asia’s worst performing currency and a brewing US- China trade war have increased investor caution toward one of the region’s most expensive markets.
Puregold Price Club, Inc., one of the nation’s largest grocery store operators, tumbled more than 11%, its sharpest loss since August 2015 after 2017 earnings missed estimates and analysts warned about headwinds. BDO Unibank, Inc., the nation’s biggest bank, fell as much as 4%, the biggest drag on the index.
“We could still see more sell- off as there are concerns in the market that consumer spending is getting hurt from the weaker peso and higher inflation,” said Jonathan Ravelas, chief market strategist at BDO Unibank. “The optimism that consumer spending will pick up from the tax reform has been replaced by questions such as how much earnings will be hit by the weaker peso and higher oil prices.”
This year’s slump caught Philippine bulls off guard, many of whom entered 2018 with a positive outlook following the implementation of a tax reform program that cut personal income taxes while raising levies on other items to fund President Rodrigo R. Duterte’s infrastructure program. However, global oil prices have risen 26% in the past year, raising the fuel bill for the crudeimporting country.