Overseas news
The S&P 500 ended its longest winning streak in 2 decades on Monday. This happened as investors reacted to US President Donald Trump’s announcement of a 100% tariff on foreign-produced movies, and was also ahead of the US Federal Reserve’s (the Fed) upcoming policy decision.
Uncertainty over aggressive US tariffs has been impacting the performance of stocks and other assets. This is because higher tariffs can increase the costs of goods and services, which may affect economic activity.
Investors are also likely adopting a wait-and-see stance as they anticipate the Fed’s interest rate decision.
Changes to the key rate matter to investors since this figure influences loan and deposit rates, bond yields, and even the performance of other asset classes such as stocks.
Relatedly, the US dollar fell on Monday against key currencies such as the yen and euro as markets reacted to the ongoing uncertainty surrounding President Trump’s tariff policies and their economic effects.
Local developments
The Bangko Sentral ng Pilipinas (BSP) will have more flexibility with its monetary policy if inflation falls below 2% in April, said BSP Governor Eli Remolona.
He added that the Monetary Board’s upcoming policy rate decision will be influenced by the economy’s 1st quarter growth and how it fared against the government’s 6-8% target.
The approach of central banks towards interest rates depends on the economic conditions in their respective nations. They may raise the policy rate to manage inflation, lower it to boost economic activity, or keep it steady.
The government also unveiled a decade-long employment strategy on Monday, aiming to raise the labor force participation rate (LFPR) to 68.2% by 2034. LFPR is the percentage of the population aged 15 years old and over that is in the labor force.
A larger active workforce can help an economy grow, as there are more people contributing to the production of goods and services.
Meanwhile, ASEAN+3 finance ministers and central bank governors have committed to strengthening financial cooperation in the region amid growing trade uncertainty. The Philippines aims to boost trade ties with neighboring countries.
The cooling local inflation offers a bright spot though uncertainty around tariffs remains. Staying cautious with your investing decisions may be the right move for now.
