Tariff worries are expected to take center stage this week as US President Donald Trump aims to raise America’s import levy on steel and aluminum imports to 50 percent from 25 percent by June 4.
Analysts said investors are also looking forward to a number of local macroeconomic reports this week for clues on policy makers’ direction going forward.
Japhet Tantiangco, an analyst from Philstocks Financial Inc., said investors will be waiting for the May inflation print due on Thursday, which will reveal clues to the Bangko Sentral ng Pilipinas’ (BSP) policy direction.
“A low inflation-print, particularly one below the government’s 2-4 percent target may boost market sentiment as this would imply that the BSP can continue with its policy easing,” he said.
“Investors are also expected to look toward the S&P Global Philippines Manufacturing PMI and labor market data for clues on the local economy’s strength,” he added.
The S&P data will be released on Monday and the April jobs data on Friday.
“Investors are also expected to watch out for developments on the global trade front. Lack of positive developments may continue to weigh on the market,” Tantiangco said.
“The reemergence of tariff uncertainty is reordering the macro chessboard,” online stock trading platform 2tradeasia.com said.
It said the latest pushback on sweeping trade tariffs has introduced another layer of ambiguity to global funds.
The PSEi on Friday dropped 1.12 percent to 6,341.53 from 6,413.10 a week earlier.
This brought the PSEi down 2.87 percent in the year-to-date. It closed at 6,528.79 on the last trading day of 2024.
While tariffs in the headlines are often framed in political terms, markets have been focused on its real-world effects–supply chain distortions, compressed margins, and increased pricing power volatility, 2tradeasia said.
“These pressures tend to elevate equity risk (premiums), particularly in sectors dependent on cross-border trade, and could cloud earnings visibility as we enter the second half of 2025,” it said.
While the local market remains structurally insulated from direct tariff impacts, shifts in global capital allocation, especially if it triggers abrupt yield repricing, could ripple through local assets, 2tradeasia said.
“The heightened volatility and uncertainty demand that investors should make short-term tactical positioning, with balance sheet and cost flexibilty as key metrics,” it said. – with additional report from Reuters
