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Overseas news
The US and Iran agreed in principle to extend their ceasefire for 60 days and reopen shipping through the Strait of Hormuz. However, US President Donald Trump has not yet approved the deal, which Iran says remains unfinished.
In the US, personal consumption expenditure rose by 3.8% in April, its fastest pace in 3 years. This was fueled by war-driven energy costs and stronger expectations that the US Federal Reserve (the Fed) will keep interest rates steady well into next year.
The situation in the Middle East is continuing to affect oil prices, which in turn impact economies and prices around the world.
Local developments
The Philippine Stock Exchange index (PSEi) fell to a 1-month low on Thursday, with all sectoral indices finishing in the red. This came as US-Iran strikes reignited inflation fears and drove oil prices higher.
Also on Thursday, the peso slid to P61.595 per US dollar, stemming from the higher oil prices, mixed signals from peace talks, and hawkish Fed comments.
Currency values are another thing that may be affected by the situation in the Middle East. However, this happens indirectly through investment flows and the trade balance, among others.
In addition, Japanese companies pledged about P260 billion in new investments to the Philippines during President Marcos Jr.’s Tokyo visit.
Centered on manufacturing, renewable energy, shipbuilding, and digital infrastructure, these projects are expected to create over 10,000 jobs and deepen supply chain integration.
Aside from the money that they bring in, new investments can also be a sign of confidence in a country’s future performance.
While there are now hints that the US-Iran conflict may be settling down, this is still not a sure thing. In the meantime, continuing your strategy might be the right move, especially if it has remained effective for you.
