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INVESTMENT STRATEGY
THE BASICS
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Policy rate views: Keep rates and carry on
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Inflation Update: Price-rise surprises at 2.1% in February
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Economic Updates
Monthly Economic Update: Somewhat less dovish
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March
28
The Gist
A daily dose of market updates and smart investment strategies to guide your portfolio decisions
Today's Report
Your Morning Fix
- After consultations with the Philippine Stock Exchange (PSE), the Securities and Exchange Commission (SEC) has approved a reduced initial public float of 15% for certain companies, subject to strict conditions.
- The National Government plans to secure PHP 735 billion from the domestic market in the second quarter, allocating PHP 325 billion to Treasury bills and PHP 410 billion to Treasury bonds.
- The Bangko Sentral ng Pilipinas (BSP) said the Philippine financial sector remains strong and capable of absorbing shocks, though external challenges pose moderate risks requiring close observation.
- Canadian Prime Minister Mark Carney warned of potential trade actions next week if US President Donald Trump proceeds with imposing 25% tariffs on imported cars, escalating the global trade war.
- US Secretary of Health and Human Services Robert F. Kennedy Jr. unveiled plans to restructure federal public health agencies, involving 10,000 job cuts and centralizing functions across the Food and Drug Administration (FDA), Centers for Disease Control and Prevention (CDC), and the National Institutes of Health (NIH).
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 | 5.8% | 6.2% | 6.0% |
| Inflation | 3.1% | 3.2% | 3.0% |
| BSP Target Reverse Repurchase Rate | 5.25% | 4.50% | 5.00% |
| Federal Funds Rate | 4.00% | 3.25% | 4.00% |
| USD/PHP | 57.9 | 56.5 | 55.0 |
CHART OF THE DAY
Chart of the Day
US economy expands by 2.4% in Q4
The US Bureau of Economic Analysis’ third estimate shows the US’ real gross domestic product increased by 2.4% quarter-on-quarter in Q4, 0.1 percentage points higher than the last estimate due to a downward revision to imports. Last quarter’s performance also mainly reflects growth in consumer spending, partly offset by a decline in investments. Sources: Bureau of Economic Analysis, Bloomberg
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USD/PHP closes lower amid heavier supply
- The USD/PHP exchange rate opened 1 centavo lower at 57.68 on Thursday, despite the dollar continuing to gain against peers overnight amid threats of additional US tariffs on top of decent US economic data.
- Initially, local supply scaled in at 57.75, but slowly scaled down throughout the day, leading the local pair to grind lower throughout the session.
- Supply easily outweighed buying interest from importers, with most already having covered their requirements earlier during the month.
- The USD/PHP exchange rate ultimately closed at 57.37, or 32 centavos lower day-on-day.
- The current support levels of USD/PHP are at 57.20/30 while the resistance levels are at 57.40/50.
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Local GS sees better buying by quarter-end
- The local government securities (GS) market opened well-bought on Thursday, with benchmark bonds trading 3 to 4 basis points (bps) lower, likely due to quarter-end demand.
- The Bureau of the Treasury released its borrowing program for the 2nd quarter, including issuances in 3-, 5-, 7-, 10-, 15-, 20-, and 25-Year tenors, as expected.
- Regular weekly auction sizes remained at PHP 30 billion, while dual-tranche auctions increased from PHP 35 billion to PHP 40 billion, bringing total planned borrowings for the 2nd quarter to PHP 410 billion, up from PHP 365 billion.
- Retail Treasury Bond 5-18 was the most active, closing 3.5 bps lower, while Fixed Rate Treasury Note 7-70 saw strong demand near 5.92%.
- The Bangko Sentral ng Pilipinas’ Reserve Requirement Ratio cut takes effect today, but the market has largely priced in this move.
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PSEi pulls back on cautious sentiments
- The Philippine Stock Exchange index (PSEi) ended 26.54 points lower at 6,139.51 on Thursday, as cautious sentiment dominated, following heightened US tariff tensions.
- Sectors ended mixed, with Mining & Oil (+0.81%), Property (+0.13%), and Financials (+0.06%) finding some footing, while Industrials (-1.27%), Services (-1.11%), and Holding Firms (-0.29%) bore the brunt of the selling pressure.
- JG Summit Holdings Inc. (+2.33%), Semirara Mining & Power Corp. (+1.97%), and Globe Telecom Inc. (+1.8%) topped the gainers’ list.
- Meanwhile, Bloomberry Resorts Corp. (-5.21%), Century Pacific Food Corp. (-2.69%), and Manila Electric Co. (-2.37%) weighed heavily on the index.
- Despite bargain-hunting in select stocks, the overall tone remained cautious with geopolitical uncertainty and global trade concerns still capping risk appetite.
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