The Morning View

The Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. said that the central bank has room to raise its policy rates. He said the National Government’s planned catch-up spending in 2H is expected to cushion the economy from a sharp slowdown amid the energy crisis. However, he noted that the central bank will avoid any excessive tightening.  

JG Summit Holdings, Inc.’s (PSE Ticker: JGS) subsidiary Cebu Air, Inc. (PSE Ticker: CEB) reported an 8.4% YoY rise in 1Q25 passenger traffic. For 2Q, CEB said it is adopting a cautious and measured approach, optimizing flight frequencies and focusing on routes with stronger demand amid ongoing air travel disruptions and soaring jet fuel prices linked to the Middle East conflict.

Local equities rose and local fixed income yields fell following reports that the US and Iran could hold another round of peace talks. The local bourse was also supported by investors’ bargain hunting after a two-day decline. 

The PSEi closed at 6,063.35 (+0.84% DoD).

On average, yields fell by 1.50 bps, with the 2Y closing at 5.78% (+2.19 bps) and the 10Y closing at 6.61% (+0.63 bps).

The Philippine peso weakened after the Overseas Filipino workers’ cash remittances fell to a nine-month low of $2.79 billion in February. The USD/PHP pair closed at 60.12 (+0.41% DoD).

US import prices rose by 0.8% MoM in March (Feb.: 0.9%, Consensus: 2.3%). The less-than-expected increase was attributed to the slower growth in nonfuel imports which offset higher fuel import prices amid the ongoing Middle East conflict.

Cleveland Fed President Beth Hammack, a 2026 voting member, stated that she expects the Fed to keep interest rates on hold “for a good while” amid threats to both inflation and employment. Likewise, St. Louis Fed chief Alberto Musalem, a 2028 voter, stated that he expects core inflation to be stuck near 3% due to high oil prices and that he expects rates to be unchanged. 

US equities were mixed as investors looked past the Iran war. Traders also turned their focus to the 1Q26 corporate earnings season, with big banks such as Bank of America and Morgan Stanley reporting upbeat results. The S&P 500 closed at 7,022.95 (+0.80% DoD), while the DJIA ended at 48,463.72 (-0.15% DoD).

US Treasury yields climbed, and the US dollar closed relatively flat as investors digested remarks from Fed officials Hammack and Musalem, suggesting policy rates may remain on hold for some time. Markets also monitored reports that Middle East peace talks could resume this week. 

On average, yields rose by 2.40 bps, with the 2Y closing at 3.77% (+1.90 bps) and the 10Y closing at 4.29% (+3.70 bps).

The DXY closed at 98.06 (-0.07% DoD). 

Sources: BusinessWorld, Inquirer, Philippine Star, Manila Bulletin, Businessmirror, PSE Edge, Bloomberg, CNBC, Reuters, CNN, Wall Street Journal, Financial Times, Market Watch

The views expressed herein by BPI Wealth – A Trust Corporation (“BPI Wealth”) are based on sources deemed reliable, but may be subject to change without notice. This material, which is strictly for information purposes only, is for your sole use, does not constitute a recommendation or an offer to sell or a solicitation to buy any financial product. Any information is subject to change without notice and BPI Wealth is not under any obligation to update or keep current the information contained herein. You are advised to make your own independent judgement with respect to the matter contained in the report. No liability whatsoever is accepted for any loss that may arise (whether direct or consequential) from any use of the information contained herein.

Unit Investment Trust Funds (UITFs) are NOT DEPOSIT products and are not an obligation of, or guaranteed, or insured by BPI Wealth or Bank of the Philippine Islands (BPI) or its affiliates or subsidiaries, and are not insured by the Philippine Deposit Insurance Corporation (PDIC). Due to the nature of the investment, yield and potential yields cannot be guaranteed. Any income or loss arising from market fluctuations and price volatility of securities held by a UITF, even if invested in government securities, is for the account of the investor/trustor. As such, units of participation of the investor/trustor in a UITF, when redeemed, may be worth more or be worth less than his/her initial participation/contribution. Historical performance, when presented, is purely for reference purposes and is not a guarantee of future results. BPI Wealth is not liable for losses, other than due to willful default, evident bad faith or gross negligence. Investors are advised to read the Declaration of Trust of the relevant UITF before deciding to invest. For inquiries and comments, visit the BPI Wealth website or call us at (02) 8580 - 2682.  

BPI Wealth is a subsidiary of the Bank of the Philippine Islands (BPI). BPI and BPI Wealth will never ask to verify or divulge your personal information such as your user ID, password and OTP (One-Time PIN) via phone, call, text messages (SMS) or link provided in emails. If you receive a call or email asking you to provide any confidential information, do not engage. Immediately change your online banking password and report the incident to 889-10000.  

BPI Wealth – A Trust Corporation is regulated by the Bangko Sentral ng Pilipinas. Visit the BSP website for more details.