PHILIPPINE SHARES could decline this week as investors continue to book their gains from the market’s recent rally and with the peso’s weakness weighing on sentiment.

On Friday, the Philippine Stock Exchange index (PSEi) fell by 0.35% or 22.86 points to end at 6,464.67, while the broader all shares index edged down by 0.22% or 8.37 points to close at 3,652.33.

Meanwhile, week on week, the PSEi climbed by 116.53 points from its Jan. 9 finish of 6,348.14, marking its fourth consecutive week of gains.

“The local market continues with its bullish move, extending its rally to a fourth straight week. Other numbers are also encouraging with net value turnover averaging P6.64 billion, reflecting quite strong conviction. Net foreign buying is already on an 11-day streak amounting to P5.61 billion,” Japhet Louis O. Tantiangco, Research Manager at Philstocks Financial, Inc., said in a Viber message.

“The local bourse rallied [last] week, buoyed by bargain hunting in index heavyweights and rate-sensitive names. Confidence took its support from a potential February BSP (Bangko Sentral ng Pilipinas) rate cut and cheap valuations,” 2TradeAsia.com said in a market note.

BSP Governor Eli M. Remolona, Jr. this month said that a cut remains on the table at the Monetary Board’s Feb. 19 meeting, even as he noted that the policy rate of 4.5% is already “very close” to where they want it to be, signaling an imminent end to their easing cycle.

The Monetary Board has lowered benchmark borrowing costs by a total of 200 basis points since this current rate cut round began in August 2024.

Meanwhile, analysts have said that the central bank could still ease further to help support domestic demand as prospects have weakened due to a wide-ranging corruption scandal that has stalled both public and private investments, dragging economic expansion.

For this week, Mr. Tantiangco said profit taking could weigh on the local market, adding that valuations remain at bargain levels despite the market’s recent climb.

“The peso’s weakness, if it extends, may also challenge the local bourse,” he said.

On Thursday, the peso slumped to a new record low of P59.46 versus the dollar. It rebounded on Friday, closing the week at P59.35.

“On a positive note, hopes that the BSP would cut rates in their February meeting may give the market support. Investors are also expected to be on the lookout for further catalysts,” Mr. Tantiangco said.

He added that the market remains “bullishly biased” as it is now trading above its 10-day, 50-day, and 200-day exponential moving averages.

He put the PSEi’s support at 6,400 and resistance at 6,600.

For its part, 2TradeAsia.com placed the PSEi’s immediate support at 6,350 and resistance at 6,500-6,600. — A.G.C. Magno