Philippine stocks headed toward a technical correction amid global market turmoil triggered by mounting concerns about a crisis at Credit Suisse AG.
(Bloomberg) — Philippine stocks headed toward a technical correction amid global market turmoil triggered by mounting concerns about a crisis at Credit Suisse AG.
The Philippine Stock Exchange Index fell as much as 1.9%, extending its loss from a January high to more than 10%, with retailer Puregold Price Club Inc. and communication services provider Converge ICT Solutions Inc. among Thursday’s worst performers.
The escalating banking crisis is raising the risk of a lending crunch that could tip economies into a recession and bite into remittances from Filipinos working abroad that contribute about 10% to the nation’s economy.
“If the US goes into a recession, it will affect the Philippine economy because it’s a major source of employment for our overseas workers and a major trading partner,”said Jose Vistan, vice president at AB Capital Securities.
Recession Fears Soar as Credit Suisse Woes Threaten Loan Crunch
The risk of elevated domestic inflation and high interest rates curbing consumer spending contributed to recent declines in Philippine stocks.
Global funds have net sold almost $566 million of domestic equities so far this year. The selloff extended by $491 million this week through March 15 as Silicon Valley Bank’s collapse sparked a global risk off sentiment.
–With assistance from Manolo Serapio Jr..
(Adds analyst comment and chart.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.