Slow economy drags PH share prices lower

MANILA – Philippine share prices lost the momentum from a two-day uptrend to drop below the 7,800-level on the benchmark PSEi on Thursday, as the market was shaken by weaker-than-expected gross domestic product (GDP) data in the first quarter.

“I think it’s really the GDP. The consensus was 6.5. The market’s expensive, so you have to be growing 6.5 to 7.0 percent,” Carlo Capacillo, senior dealer at AP Securities Inc., said.

The main PSEi dropped 68.84 points or 0.88 percent to 7,757.69 at the closing bell. The broader All Shares lost 26.59 points or 0.57 percent to 4,626.42.

The Philippine Statistics Authority (PSA) reported the economy grew by 6.4 percent in the first quarter of the year, slower than the 6.5 to 7.0 percent forecast.

I t compares with 6.6 percent in the fourth quarter and the revised 6.8 percent in the first quarter of 2016.

It was also the slowest in more than a year compared with 6.3 percent in the fourth quarter of 2015, and matched the 6.4 percent in the third quarter of the same year.

“We do expect the market to trade lower since the GDP doesn’t justify a higher valuation in the PSEi as a whole,” Capacillo said.

He noted that US markets were also weak overnight after reports of a leaked memo by former Federal Bureau of Investigation ( FBI) Chief James Comey raised concerns that US President Donald Trump could have tried to interfere with a federal investigation.