Philippine shares rebounds on BSP’s surprise rate cut

Share prices on the Philippine Stock Exchange ended the week in the green on Friday as investors cheered the central bank’s move to slash interest rate in a bid to keep the economy afloat amid the COVID-19 crisis.

The bellwether PSEi gained 264.37 points or 4.78% to 5,789.97 at the closing bell. The broader All Shares increased by 122.30 points or 3.63% to 3,492.43.

“Locally, shares got a boost from the surprise BSP (Bangko Sentral ng Pilipinas) [rate] cut of 50 basis points,” Regina Capital head of sales Luis Limlingan said.

BSP Governor Benjamin Diokno on Thursday announced key policy rates will be slashed by 50 basis points effective Friday, April 17, 2020. 

This will bring the overnight reverse repurchase rate to 2.75%, the overnight deposit facility to 2.25%, and the overnight lending facility to 3.25%.

The move provides stimulus as the Philippines faces challenges due to halt in economic activities amid the COVID-19 spread. Lower interest rates means cheaper borrowing and more available funds to the economy.

More than 733.288 million shares valued at P7.286 billion, changed hands. Advancers led decliners, 142 to 63, and 27 issues were unchanged. — RSJ, GMA News