Upbeat comments from the government about its economic targets on Wednesday also aided the bullish sentiment.
The main index ended up 18.85 points, or 1.36 percent, at 1,407.49 points, breaching the 1,400-point psychological resistance level which had held firm after attempts to test it earlier in the month.
It was the highest closing level since ending at 1,410.07 points on June 29 last year.
Turnover also picked up, rising to P775.36 million from P555.33 million on Wednesday.
"I think everybody was expecting the central bank to announce a rate cut today and that has been positive for the market, pretty much across the board," United Coconut Planters Bank trust fund manager Vanessa Lim said.
Government remarks on Wednesday that it may set more ambitious economic targets for 2002 because of signs of a quicker-than-expected recovery also underpinned the market gains.
Aside from the positive impact of the rate cut, market players also cheered two decisions of the Philippine Stock Exchange (PSE) board of governors during their own regular meeting last Wednesday.
The PSE board voted to extend the trading hours on the floor to move to perk up the market by attracting more volume and aligning its movement with the rest of the regional bourses.
Tentatively scheduled to start on Monday, Feb. 18, the daily trading activities will extend for another one-and-a-half hours from 1:00 p.m to 2:30 p.m. daily, following the usual 9:30 a.m. to 12:00 schedule.
DBS Vickers Ballas associate sales director Eric Santa Ana said many local investors appeared to be taking advantage of the market’s ongoing strength as well as the absence of many foreign players for the Lunar New Year holiday to come in.
"The upbeat mood has carried over into the New Year, buying flows have been up since January," he said, adding however that many of the players appear to be short term and for the market to sustain its upside, further fresh funds would be needed.
"The market is dominated by punters, short term investors...we need new funds in to continue the upward momentum,"Santa Ana said.
Buying was broad-based yesterday, although property issues such as Ayala Land, SM Prime and Filinvest Land were among the heaviest traded stocks, largely as a natural consequence of the drop in interest rates seen to benefit real estate companies.
By sectoral indices, the property counter moved higher along with the commercial-industrial and financial services groups. The mining and oil sectors, on the other hand, moved down as investors focused on the more upbeat counters.
Property stocks gained again on the rate cut anticipation. Ayala Land was up 10 centavos at P6.7 on top turnover of P138.15 million, while mall developer SM Prime also gained 10 centavos to P6.70.
Second liner Filinvest Land ,however, lost ground on profit taking after four days of gains, easing eight centavos to P2.08.
San Miguel shares rose sharply with the B’s up P2.5 to P68 and the A’s gaining P2 to P50.50.
Traders said there was no particular factor driving the gains but investors continue to position in the stock in the belief the firm will post strong earnings this year following its restructuring efforts, spate of acquisitions, and anticipated Kirin Brewery buy-in.
The country’s biggest oil refiner, Petron Corp was another significant riser, up six centavos at P1.94 .
"There was a rumor of a cash dividend payment by the company," Santa Ana said, following an anticipated return to profit last year, after the firm posted a one billion pesos loss in 2000.
Manila Electric Co. continued to gain, despite reports that its unaudited net income last year fell 40 percent from a year ago.
Traders said investors remain upbeat that the firm will get a long sought after tariff hike this year, helping to lift its bottom line.
The B-shares ended up P1.5 at P42.5 while the A-shares rose by the same amount to P30.
Among losers, Philippine Long Distance Telephone shed P5 to P510 while Robinson Land dipped 12 centavos to P1.78 after announcing its three months to December 2001 net income fell sharply.