“Tensions between Israel and Iran undoubtedly pose risks to the global economy,” said Mark Race, president and CEO of BPI Securities. “As a major oil importer, the Philippines is exposed to price shocks. However, we take a measured view—year-to-date, the key inflation drivers for the early second quarter reflect moderation, particularly in food and utility costs, and easing transport prices.”
Race highlighted a drop in rice prices as a significant contributor to lower food inflation. “Year-on-year rice prices are down by more than 11 percent, and that has a meaningful impact on overall inflation expectations for the rest of the year,” he added.
On equities, BPI Securities said the Philippine Stock Exchange Index (PSEi) remains technically supported, despite foreign fund outflows.
“We continue to trade above the 6,300 level, with 6,500 acting as immediate resistance,” Race said. “Our longer-term outlook is constructive—we maintain our year-end target of over 7,000, underpinned by projected core earnings growth of 8 percent.”
Foreign selling reached P35 billion to P36 billion year-to-date, but Race said reduced foreign holdings have mitigated volatility. “The Philippines is a consumption-driven economy with strong fundamentals. Combined with the possibility of lower interest rates, this remains a compelling proposition for select foreign funds.”
BPI Securities believes that barring major geopolitical escalation, macroeconomic stability and attractive valuations will continue to support investor confidence through the second half of 2025. —Ed: Corrie S. Narisma
