The Morning View

S&P Global Ratings and Asian Development Bank (ADB) trimmed their PH economic growth forecasts for 2026 to 2.9% (previous: 4.1%) and 3.3% (previous: 3.8%), respectively. The firms cited weaker public investments and heightened price pressures from food and energy as reasons behind the downgrade.

Jollibee Foods Corporation (PSE Ticker: JFC), through its subsidiary JSF Investments Pte. Ltd., has agreed to sell an 11% stake in the operating entity of Highlands Coffee to Viet Thai International Joint Stock Company for $88 million. The transaction reduces JFC's holding from 60% to 49%, ceding controlling interest. JFC said it plans to use the proceeds to reduce debt, invest in other businesses, and return capital to shareholders.

Local equities fell amid negative sentiment after S&P Global and ADB sharply downgraded their PH economic growth forecasts. The PSEi closed at 5,795.14 (-0.33% DoD).

Local fixed income yields closed mixed after the Bureau of the Treasury announced it may raise a lower volume from its planned 2.5-year retail treasury bond issuance. On average, yields fell by 1.40 bps, with the 2Y closing at 6.68% (-1.55 bps) and the 10Y closing at 7.60% (+0.97 bps).

The Philippine peso strengthened on hopes of a reopening of the Strait of Hormuz after Iran signaled openness to a diplomatic resolution. The USD/PHP pair closed at 62.59 (-0.22% DoD).

US President Donald Trump welcomed Chinese President Xi Jinping in Washington for a three-day summit from September 23 to 25, with trade, technology, and Iran among the key issues on the agenda. Meanwhile, Treasury Secretary Scott Bessent confirmed a two-month extension of the bilateral trade truce through January 10, from its original November 10 expiration, following discussions with Chinese Vice Premier He Lifeng. 

US S&P Composite Purchasing Managers’ Index (PMI) Output Index jumped to 58.4 in September (August: 56.0; Consensus: 55.3). The reading was the highest since July 2021 and stayed above 50, indicating continued expansion. Growth was driven by a surge in new orders, although rising input costs and a buildup in backlogs pointed to mounting capacity pressures.

US equities fell, US Treasury yields soared, and the US dollar strengthened after hawkish comments from Fed Governor Barr, signaling further rate hikes may be warranted to bring down inflation. Investors also digested the stronger-than-expected US S&P Global composite PMI reading for September. 

The S&P 500 closed at 7,706.03 (-0.75% DoD), while the DJIA ended at 51,511.59 (-0.68% DoD).

On average, yields rose by 10.68 bps, with the 2Y closing at 4.90% (+14.10 bps) and the 10Y closing at 5.12% (+15.10 bps).

The DXY closed at 101.10 (+0.49% DoD). 

Sources: BusinessWorld, Inquirer, Philippine Star, Manila Bulletin, Businessmirror, PSE Edge, Bloomberg, CNBC, Reuters, CNN, Wall Street Journal, Financial Times, Market Watch

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