Inflation Update: Price-rise slips to 1.8% in March, green light for BSP’s rate cut
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Monthly Economic Update: Green light for easing?
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Policy rate views: Keep rates and carry on
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The Gist
A daily dose of market updates and smart investment strategies to guide your portfolio decisions
Today's Report
Your Morning Fix
- Philippine shares plunged to their lowest level since October 2022, with the PSEi dropping 4.29% to 5,822.85 and the all shares index falling 4.02% to 3,496.77, as global trade tensions intensified following new US tariffs.
- The Department of Tourism (DoT) anticipates higher tourism revenue this year, building on the PHP 760 billion generated in 2024 and boosted by a new tax refund policy for tourists.
- The Department of Transportation (DoTr) plans to involve the private sector in managing and modernizing up to 20 airports through public-private partnerships, expanding from an initial target of nine airports.
- The global trade war intensified on Monday as US President Donald Trump threatened higher tariffs on China and as the European Union proposed its own counter-tariffs.
- Oil prices fell by about 3% on Monday to their lowest since 2021, accompanied by declines in metals and coffee markets, as escalating US-China trade tensions raised concerns over demand for commodities
Our Portfolio Recommendation
For the peso portfolio, we recommend a neutral 50-50 split between fixed income and equities. While the Bangko Sentral ng Pilipinas and US Fed rate cuts support risk assets, potential headwinds from tariffs and market volatility may call for a balanced approach to capture fixed income gains while maintaining equity exposure. In the dollar portfolio, we maintain an overweight stance on equities at 55% versus 45% in fixed income, driven by US market strength and robust corporate earnings. Though Fed rate cuts are anticipated, we remain cautious of tariff impacts and stagflation risks, balancing equity upside potential with fixed income stability.
| 2025 Metrobank Forecast | 2026 Metrobank Forecast | 2027-2029 Metrobank Forecast | |
|---|---|---|---|
| GDP | 6.2% | 6.2% | 6.0% |
| Inflation | 3.2% | 3.0% | 3.0% |
| BSP Target Reverse Repurchase Rate | 5.00% | 4.25% | 5.00% |
| Federal Funds Rate | 3.75% | 3.00% | 4.00% |
| USD/PHP | 57.9 | 56.5 | 55.0 |
CHART OF THE DAY
Chart of the Day
PH maintains strong external buffer
The Philippines’ gross international reserves (GIR) decreased to USD 106.2 billion by end-March 2025 from USD 107.4 billion in February. This GIR level provides a strong external liquidity buffer, covering 7.3 months of imports and 3.7 times of the short-term external debt. This reflects the country’s capability to maintain financial stability despite the slight decline. Sources: BSP, Bloomberg
Featured Reports
More Reads
USD/PHP returns above 57 on dollar recovery
- The USD/PHP exchange rate opened 28 centavos lower at 57.10 on Monday, and proceeded to grind higher as dealers rushed to trim overly strong peso bets and fixing maturities.
- Upward momentum was driven by the massive recovery of the dollar against majority of its peers after risk sentiment took a turn for the worse, while US job figures came out much stronger than anticipated.
- Rhetoric of a “wait and see” approach from US Federal Reserve Chief Jerome Powell added to the strong dollar sentiment.
- The USD/PHP exchange rate ultimately closed at 57.43, or 60.9 centavos higher day-on-day.
- The current support levels of USD/PHP are at 56.30/40 while the resistance levels are at 56.50/60.
READ MORE
Local GS sees two-way interest in the belly
- Local government securities (GS) yields opened steady on Monday, but rose 6 to 13 basis points (bps) as profit-taking took over.
- The Treasury bill auction saw weak demand for the 3-month bill, but solid interest for the 6-month and 1-year tenors.
- Trading was focused on the 4- to 20-Year segment, with good two-way flow as some investors locked in gains while others repositioned.
- The Bureau of the Treasury will reissue PHP 30 billion of FXTN 20-17 today.
- The Bangko Sentral ng Pilipinas is expected to cut policy rates by 25 bps on Thursday to 5.50%.
READ MORE
PSEi dives below 6,000 amid selloff
- The Philippine Stock Exchange index (PSEi) ended 261.34 points lower at 5,822.85 on Monday, its lowest since September 2022.
- All sectoral indices ended lower, led by Mining & Oil (-8.75%), Services (-4.97%), and Industrials (-4.81%).
- The sharp decline saw heavyweights Jollibee Food Corp. (-9.46%) and Bloomberry Resorts Corp. (-8.71%) leading the laggards.
- This sharp selloff reflected deepening fears over escalating global trade tensions, as reciprocal tariffs between major economies take effect this week.
- Foreign investors dumped local shares aggressively, resulting in a net foreign outflow of PHP 3.24 billion—the biggest since end-February.
READ MORE
USD/PHP returns above 57 on dollar recovery
- The USD/PHP exchange rate opened 28 centavos lower at 57.10 on Monday, and proceeded to grind higher as dealers rushed to trim overly strong peso bets and fixing maturities.
- Upward momentum was driven by the massive recovery of the dollar against majority of its peers after risk sentiment took a turn for the worse, while US job figures came out much stronger than anticipated.
- Rhetoric of a “wait and see” approach from US Federal Reserve Chief Jerome Powell added to the strong dollar sentiment.
- The USD/PHP exchange rate ultimately closed at 57.43, or 60.9 centavos higher day-on-day.
- The current support levels of USD/PHP are at 56.30/40 while the resistance levels are at 56.50/60.
READ MORE
Local GS sees two-way interest in the belly
- Local government securities (GS) yields opened steady on Monday, but rose 6 to 13 basis points (bps) as profit-taking took over.
- The Treasury bill auction saw weak demand for the 3-month bill, but solid interest for the 6-month and 1-year tenors.
- Trading was focused on the 4- to 20-Year segment, with good two-way flow as some investors locked in gains while others repositioned.
- The Bureau of the Treasury will reissue PHP 30 billion of FXTN 20-17 today.
- The Bangko Sentral ng Pilipinas is expected to cut policy rates by 25 bps on Thursday to 5.50%.
READ MORE
PSEi dives below 6,000 amid selloff
- The Philippine Stock Exchange index (PSEi) ended 261.34 points lower at 5,822.85 on Monday, its lowest since September 2022.
- All sectoral indices ended lower, led by Mining & Oil (-8.75%), Services (-4.97%), and Industrials (-4.81%).
- The sharp decline saw heavyweights Jollibee Food Corp. (-9.46%) and Bloomberry Resorts Corp. (-8.71%) leading the laggards.
- This sharp selloff reflected deepening fears over escalating global trade tensions, as reciprocal tariffs between major economies take effect this week.
- Foreign investors dumped local shares aggressively, resulting in a net foreign outflow of PHP 3.24 billion—the biggest since end-February.
READ MORE