Overseas news
The US and China have agreed to temporarily reduce the steep tariffs they imposed on each other’s products. This eased trade tensions and boosted global stocks and the US dollar.
In the next 90 days, US tariffs on Chinese imports will drop from 145% to 30%, while China’s tariffs on US imports will decrease from 125% to 10%.
Investors have been closely watching tariff moves between the 2 countries due to the potential effects of these decisions on the global economy.
In April, Japanese investors bought a record amount of foreign stocks. Foreign equity purchases hit a high of 3.27 trillion yen ($22.37 billion) while foreign bond withdrawals reached 1.08 trillion yen.
The shift away from bonds is seen as a move to rebalance portfolios and take advantage of reduced stock prices, driven by uncertainty over US tariffs.
Local developments
The national government’s debt servicing dropped 65.63% year-on-year to hit P183.36 billion in March due to lower amortization payments.
However, it was a 251.57% surge from P52.15 billion in February, with amortization making up 51.94% of the total.
Debt servicing refers to the money needed to pay the principal and interest on a loan for a certain period. This amount can change when interest rates go up and down.
Meanwhile, the Philippines saw 2.1 million visitor arrivals from January to April, showing a 0.82% decline versus the same period last year. Foreign travelers accounted for 1.93 million of the arrivals, while overseas Filipinos made up 170,815.
Tourism may contribute to a country’s economy through job creation and demand for goods and services. Decreased arrivals may lead to a smaller contribution of tourism to economic growth.
Additionally, net foreign direct investment (FDI) fell 61.9% year-on-year to hit $529 million in February, while total investments for the first 2 months of 2025 dropped 45.2%.
Equity capital investments plunged 85.9% while investments in debt instruments went down 35.4%.
The Bangko Sentral ng Pilipinas (BSP) attributed the decline to a high base effect, which is when the initial figure is big enough to show a decline or make the drop more significant.
FDI is an important source of external financing for developing countries. It refers to a substantial stake in, or complete ownership of, a company or project by a foreign organization or government.
The US-China agreement may ease immediate tariff concerns, but there is no clear indication of where the markets are heading over the long term. For now, staying cautiously optimistic while avoiding big changes might be the ideal move for you.
