{"id":332170,"date":"2025-04-08T00:54:59","date_gmt":"2025-04-07T16:54:59","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=332170"},"modified":"2025-04-08T00:55:00","modified_gmt":"2025-04-07T16:55:00","slug":"commentary-tariff-proofing-the-philippines","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/commentary-tariff-proofing-the-philippines\/","title":{"rendered":"Commentary: Tariff-proofing the Philippines"},"content":{"rendered":"\n

Tariff-proofing the Philippines<\/strong><\/p>\n\n\n\n

Trade tension has escalated as \u201cLiberation Day\u201d initiated by President Donald Trump reignites retaliatory tariffs by other countries. Asian currencies may face significant fluctuations amid heightened risks of global GDP slowdown, higher inflation, and deferred rate cuts.<\/p>\n\n\n\n

The Philippines is still widely-viewed as being relatively insulated but not completely immune from the brewing global trade tensions. Key reasons include: (1) a domestic-driven economy; (2) strong remittance inflows; (3) limited exposure to manufacturing trade wars; (4) service-oriented economy with a thriving BPO industry; (5) diversified trade partners; and (5) policy measures i.e., active pursuit of free trade agreements and regional trade partnerships.<\/p>\n\n\n\n

As per Bloomberg Intelligence in its assessment of the tariff impact on ASEAN: Uncertainties are high but the more domestic-demand-driven economies in Asean\u2014Indonesia and Philippines\u2014should better weather the trade shock.<\/p>\n\n\n\n

Impact on PHP Peso<\/strong><\/p>\n\n\n\n

The new US tariffs are also expected to add pressure on ASEAN currencies including the PHP. While the general rule is that a weaker PHP usually translates to weaker PSEi, the degree of the relationship\/sensitivity has significantly weakened primarily because of lack of foreign participation in the market and low foreign ownership level. <\/p>\n\n\n\n

In any case, we highlight that a weaker PHP is generally negative for the Conglos and Consumer sectors but positive for Property and more neutral for Power\/Utilities. <\/p>\n\n\n\n

We suggest that investors look beyond the market (volatility) and instead focus on selective stock-picking. Among our high conviction stock bets: BDO, ALI, AP, CNVRG, MONDE & SM.<\/p>\n\n\n\n

BSP signals April rate cut <\/strong><\/p>\n\n\n\n

The Fed rate cut expectations is now mixed with implied probabilities pointing to \u201cno
change\u201d in May. Nevertheless, there are now increased probabilities for 25bp rate cuts each in June and July, as per CME FedWatch. Other than tariff threats, the market is potentially pricing in weak US jobs and PMI data.<\/p>\n\n\n\n

The BSP, however, remains dovish and have signaled a cut on April 10 amid easing inflation and calls to buoy economic recovery. We maintain our forecast for a 50bps (0.50%) rate cut this year, but timing is muddled by FX volatility given potential narrowing of rate differential and wider current account deficit.<\/p>\n\n\n\n

<\/div>\n\n\n\n

This report is prepared by PinoyInvestor\u2019s partner broker below. Find out more about our partner brokers<\/a> and sign up to avail their complete trading brokerage services.<\/em><\/em><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Here\u2019s a commentary on an important issue or event affecting the stock market<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1124,11],"tags":[],"class_list":["post-332170","post","type-post","status-publish","format-standard","hentry","category-commentaries-special-reports","category-special-reports","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/332170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=332170"}],"version-history":[{"count":1,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/332170\/revisions"}],"predecessor-version":[{"id":332172,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/332170\/revisions\/332172"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=332170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=332170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=332170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}