Overseas news
Globally, stocks and oil prices dropped on Thursday amid concerns that China might retaliate with higher tariffs in response to the latest US trade measures.
The US-China trade war continues to escalate, shaking financial markets worldwide due to its potential impact on the prices of goods and services as well as global economic growth.
China is a significant trade partner for the US and also a major manufacturing source for US companies. Together, the 2 countries make up a huge share of the global economy.
Further, heightened uncertainty and stress in the US bond market, partly due to aggressive tariffs, show the need for a cautious, wait-and-see approach to monetary policy. This was according to Chicago Federal Reserve President Austan Goolsbee.
This may hint at a slower pace of rate cuts by the US Federal Reserve (the Fed). Changes in interest rates matter to investors due to their effects on financial matters like loan rates, bond prices, and the stock market.
Meanwhile, Southeast Asian nations are seeking tariff discussions with the US and have decided against implementing retaliatory actions, ASEAN economic ministers said on Thursday.
Local developments
The Bangko Sentral ng Pilipinas (BSP) lowered its key interest rate by 0.25% to reach 5.5% on Thursday. The BSP also hinted at further monetary easing amid global economic challenges.
Continued easing means further rate cuts may still happen. Lower interest rates make it less costly to borrow money and can eventually lead to higher demand for goods and services.
Relatedly, Moody’s Analytics lowered its Philippine economic growth forecast for 2025 from 5.9% to 5.8%. It cited weaker growth prospects driven by the impact of a 17% US reciprocal tariff, which may affect demand for locally-made goods.
As uncertainty over US tariffs remains high, you may want to adopt a cautious approach with your investing decisions.
