Positioning between relief and risk
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The Philippine equities market is uncertain due to the ongoing US-Iran conflict, with potential risks to the country's economy through increased oil prices and inflation. Analysts recommend a balanced approach, as a prolonged conflict could negatively impact the country's GDP and financial conditions.
The Philippine equities market is struggling to stay above 6,000 amid the ongoing US-Iran conflict. Analysts from First Metro Securities believe the conflict is a macro transmission story, with risks to the country's economy through increased oil prices and inflation. The Philippines is heavily reliant on energy imports from the region, with crude oil making up 96% of imports. A prolonged conflict could lead to higher inflation, reduced GDP growth, and tighter financial conditions. The country's remittances from overseas workers in the Middle East could also be affected. With inflation already rising to 4.1% in March, the Bangko Sentral ng Pilipinas may delay rate cuts, leading to tighter financial conditions.
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