The Morning View

The Bangko Sentral ng Pilipinas (BSP) reported that net inflows of foreign direct investments (FDI) dropped by 27.8% YoY to $498 million in March (Feb.: $533 million). The decline mainly stemmed from lower net inflows for net debt and equity instruments, as heightened global trade uncertainty continued to dampen cross-border investments. In 3M25, FDI net inflows came in at $1.76 billion, down by 41.1% YoY.

SM Prime Holdings, Inc.’s (PSE Ticker: SMPH) hospitality arm, SM Hotels and Convention Corp. (SMHCC), said seven hotel projects are scheduled for completion by end-2029. The new developments will add more than 1,300 rooms to SMHCC’s inventory, increasing its total room count to 3,923. These hotels will be in Metro Manila, Calabarzon, Central Luzon, Cebu, and Laoag.

Local equities fell, local fixed income yields ended mixed, and the Philippine peso was flattish as traders awaited the outcome of the ongoing trade negotiations between the US and China. 

The PSEi closed at 6,347.67 (-0.91% DoD). 

On average, yields fell by 0.47 bps, with the 2Y closing at 5.71% (+0.39 bps) and the 10Y closing at 6.30% (-0.06 bps).

The USD/PHP pair closed at 55.83 (+0.04% DoD). 

The World Bank has revised its global growth forecast downward from 2.7% to 2.3% in 2025. If realized, this would mark the slowest growth rate since 2008, excluding periods of global recession. The adjustment is largely attributed to the adverse effects of trade uncertainties, particularly higher tariffs.

The NFIB Small Business Optimism Index increased for the first time this year to 98.8 in May (Apr: 95.8). This was above the market’s expectation of 96.0. The improvement was attributed to respondents expecting better business conditions and sales expectations. Nonetheless, uncertainty remained elevated as business owners navigated through Trump’s trade policies. 

US equities inched higher, US Treasury yields closed mixed, and the US dollar strengthened as investors expected a positive outcome to the ongoing US-China trade negotiations. The US and China have agreed on a framework towards easing export restrictions for both parties.

The S&P 500 closed at 6,038.81 (+0.55% DoD), while the DJIA ended at 42,866.87 (+0.25% DoD).

On average, yields fell by 0.30 bps, with the 2Y closing at 4.02% (+1.70 bps) and the 10Y closing at 4.47% (-0.40 bps).

The DXY closed at 99.10 (+0.16% DoD). 

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

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