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Overseas news
Oil prices surged on Monday as the US-Iran situation led to closures of oil and gas facilities across the Middle East. Iran also closed the Strait of Hormuz, an important passage for oil and gas shipping.
Many industries across the world are affected by changing oil prices, like transportation and manufacturing. In turn, consumers may feel the effects directly (through fuel costs) and indirectly (through the prices of products and services).
Relatedly, the US dollar strengthened on Monday as investors flocked to “safe haven” assets amid expectations of a prolonged conflict and uncertainty in the Middle East.
Meanwhile, US manufacturing activity expanded for the 2nd straight month in February, largely due to a high demand for technology products.
This was according to manufacturing Purchasing Managers’ Index (PMI) data from the Institute of Supply Management (ISM).
PMI is an index that shows if market conditions are seen as expanding (index over 50), staying the same (index at 50), or contracting (index under 50).
Local developments
Philippine manufacturing activity grew at its fastest pace in 8 years in February as increases in new orders and output ramped up. This was according to S&P’s manufacturing PMI data.
Additionally, government agencies recorded a 42.2% cash utilization rate in January, lower than the 78% rate from the same period last year. This was according to the Department of Budget and Management (DBM).
The DBM issues notices of cash allocation (NCAs) every quarter to cover the cash requirements of government agencies’ programs and projects.
Low utilization may hint at a slowdown in government spending, which can affect the country’s economic growth.
With the conflict in the Middle East fueling uncertainty, you may want to stay cautious with your investing approach for the meantime.
