Overseas news
In the US, new applications for unemployment benefits fell to 220,000 last week, slightly below economists’ expectations.
While the latest figure hints that the job market remains healthy, the US government’s sharp spending cuts and the developing trade war pose risks to long-term market stability.
US President Donald Trump announced plans to impose a 200% tariff on European alcohol imports in response to the EU’s proposed tariffs on American goods, further escalating the trade war.
Tariffs are a type of tax that is charged on items that come from another country. When tariffs increase, those imported goods become more expensive, affecting consumers and businesses.
Local developments
The Bangko Sentral ng Pilipinas (BSP) wants to amend regulations on non-deliverable exchange forward and swap contracts involving the peso.
Forward and swap contracts are types of foreign exchange transactions. The BSP’s proposed changes are aimed at managing risks involving these types of agreements.
The planned amendments include allowing for pre-termination or cancellation before the maturity date, among others.
Due to record-high rice imports last year, the farm gate price of unmilled rice dropped by 18.9% compared to the previous year, averaging P20.29 per kilogram.
Additionally, Manila Water Co. customers may see higher water bills starting April. This is due to an increase approved by the MWSS Regulatory Office (MWSS RO) to recover foreign exchange losses.
Water concessionaires like Manila Water may use foreign currency-denominated loans to finance infrastructure improvements. That’s why they’re allowed to periodically adjust rates if necessary, based on fluctuations in the exchange rate.
Changes in the prices of food staples and utility bills can affect many Filipinos and impact the inflation rate.
Developments in the US have the potential to affect local markets, but it’s not yet clear how big the impact could be. You may want to remain cautious and avoid making big changes to your portfolio for now.
