Given our expectation of falling peso interest rates, we recommend maintaining an overweight position on fixed income assets to improve the portfolio’s risk and return exposure. Opportunistic investors may consider reinstating positions in medium- to long-term peso bonds at more favorable levels through the upcoming primary issuances. We then see an opportunity to shift to a neutral stance on equities towards the second half of the year, as we expect investors to lock-in gains from their overweight-fixed income positions ahead of the anticipated rate cuts by the BSP.
2024 Metrobank Forecast | 2025 Metrobank Forecast | |
---|---|---|
GDP | 5.7% | 6.2% |
Inflation | 3.3% | 3.1% |
Target BSP Reverse Repurchase Rate | 5.75% | 4.75% |
USD/PHP Trend | 55.3 | 54.5 |
Oil prices increased more than 3% on Monday, with Brent settling above USD 80 per barrel for the first time since August amid the mounting tensions in the Middle East. Both Brent crude futures and West Texas Intermediate (WTI) futures rose by 3.7% to settle at USD 80.93 and USD 77.14, respectively. The increased risk of a wider Middle East conflict started pushing prices up last week, reversing the downtrend of oil prices in August and September. Sources: Bloomberg, Reuters
DISCLAIMER: The report above is circulated for general information only. The opinions expressed are solely those of the contributors and are based on prevailing market conditions and public sources that are believed to be reliable. Metrobank and the report contributors/support staff do not make any guarantees or representation as to the accuracy, completeness or suitability of this report. The report may contain confidential or legally privileged material and may not be copied, reshared, redistributed, or published without prior written consent. Opinions or strategies contained in this publication may change without prior notice and should not take the place of professional investment advice or sound judgment on the part of the reader.