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Overseas news
US stocks slumped while oil prices surged after US President Donald Trump signaled there might not be an extension to the US-Iran ceasefire due to end this week.
This casts significant doubt on the likelihood of a lasting deal to end the Middle East conflict. The US-Iran situation has caused volatility across global markets as it triggered a major oil supply disruption.
Meanwhile, gold prices remained stable as investors cautiously monitored upcoming diplomatic discussions between the US and Iran.
Gold is generally more attractive during periods of increased uncertainty. Demand for this asset tends to grow when investors are seeking safety.
However, gold prices previously fell as Middle East tensions raised expectations of interest rate hikes. Increased interest rates tend to drive gold lower as investors look higher-yielding investments.
Local developments
Fitch Ratings lowered the Philippines' credit outlook to “negative” from “stable.” This signals a higher possibility of a credit rating downgrade in the medium term, though the country has maintained its “BBB” investment-grade rating.
Fitch said the negative outlook was driven by the country’s vulnerability to global energy shocks, which may hinder economic growth and affect the government’s efforts to maintain long-term fiscal stability.
Meanwhile, the Balance of Payments (BoP) deficit expanded to $2.6 billion in March, driven by increased outflows and the rising cost of imports amid volatile global energy and commodity markets.
The BOP is the difference between the money entering a country and the amount leaving that country during a certain period. A deficit indicates more money left the country than entered it.
Additionally, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said the Philippine banking sector remains in “very good shape” despite the economic pressures brought by the global oil crisis.
He said local banks are able to weather the impact of the ongoing crisis due to the sector’s strong position before the Middle East conflict escalated earlier this year.
As the US-Iran ceasefire nears its deadline, investors may adopt a wait-and-see stance. You can consider doing the same while staying updated on developments.
