Overseas news
US President Donald Trump ordered his economic team to create plans for reciprocal tariffs on countries taxing US imports. He also signed a memo to match duties and counteract non-tariff barriers.
Tariffs are a type of tax that a country charges on items that come from another country. Non-tariff barriers are restrictions other than tariffs that are imposed to limit or regulate trade.
If implemented, additional tariffs can make goods more expensive. On the other hand, non-tariff barriers can protect local businesses from foreign competition while also possibly limiting the flow of goods.
Meanwhile, China’s central bank announced it will adjust monetary policy as needed to support the economy. The People's Bank of China (PBOC) aims to address deepening external challenges and insufficient domestic demand.
Central banks consider economic factors such as the inflation rate when setting a monetary policy. To boost economic growth, a loose monetary policy may be implemented through different methods, such as lowering key interest rates.
Local developments
The Bangko Sentral ng Pilipinas (BSP) unexpectedly kept interest rates unchanged at 5.75% during its 1st policy meeting of the year. The BSP held rates steady due to global uncertainties, though it indicated that the easing cycle would continue.
A continued easing cycle 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.
Additionally, preliminary data from the BSP showed that the Philippine banking system’s gross nonperforming loan (NPL) ratio dropped to a 1-year low of 3.27% in December.
A lower NPL ratio indicates that borrowing households are able to repay their loans more steadily, hinting at stronger economic activity and overall financial soundness.
Meanwhile, the Philippine Stock Exchange (PSE) has approved Jollibee Foods Corp.’s (JFC) request to remove its 40% foreign ownership limit. This opens doors for more foreign investment in the company.
With some uncertainty in the news, it might be best to avoid making big changes to your portfolio for now.
