Overseas news
US stocks fell steeply on Monday as US President Donald Trump ramped up his sharp criticisms of Jerome Powell, head of the US Federal Reserve (the Fed).
This caused worry about the US central bank’s independence, further fueling uncertainty as investors deal with the effects of the developing trade war.
President Trump wants the Fed to cut interest rates sooner to reduce borrowing costs. However, the Fed has adopted a wait-and-see approach to avoid possible side effects such as inflation rising faster than expected.
Meanwhile, oil prices fell more than 2% on Monday due to signs of progress in talks between the US and Iran. This also happened as investors remained concerned that higher US tariffs may curb demand for fuel.
Local developments
The Philippines’ balance of payments (BOP) shifted to a $1.97 billion deficit in March from the $3.09 billion surplus in February.
This was driven by the national government’s withdrawal of foreign currency deposits to meet the Bangko Sentral ng Pilipinas’ (BSP) external debt obligations and net foreign exchange operations.
The BOP is the difference between the money entering a country and the amount leaving that country during a certain period. A deficit indicates that more money exited the country than entered it.
Meanwhile, the country’s debt-to-gross domestic product (GDP) ratio is projected to reach 60.2% this year, according to the ASEAN+3 Macroeconomic Research Office (AMRO).
The government’s target ratio for the end of 2025 is 60.4%, an improvement from 60.7% at the end of 2024. This ratio compares how much a country owes (debt) to how much it produces in a given period (GDP), indicating that country’s ability to pay its debt.
Additionally, the government has fully awarded the Treasury bills (T-bills) it offered on Monday at mostly higher rates than previous issuances. This happened as the ongoing offering of new 10-year Treasury bonds affected market demand.
Rising bond yields could also mean that investors require a higher rate of return on their investments to compensate for the risks they are taking.
Despite continued uncertainty in the latest news, there’s little hint of major changes happening right away. You may want to avoid making big investing decisions and stay liquid in the meantime.
