The Philippine Stock Exchange index (PSEi) is expected to surge to 7,300 by year’s end, a tad lower than the estimate of 7,600 points as Trump’s tariffs and immigration policies continue to weaken investor confidence, a Bank of the Philippine Islands Securities Corp. (BSC) report stated.

“Global economic uncertainties arising from US tariff measures continue to weigh on investor confidence,” the BSC report said.

Amid the tariff threats, analysts said the PSEi fell to 6,341 by the end of May, representing a three percent year-to-date decline. However, the index performed better by 9 percent compared to the level last 7 April.

BSC analysts also expressed concern over US President Donald Trump’s immigration policies that could slow cash flows into investment activities.

“One concern is the potential US measures on reshoring jobs and stricter immigration enforcement that could impact overseas Filipino workers’ remittances and business process outsourcing revenues,” they said.

The BSC report added that US-based Filipino workers might delay equity investments as the offshore inflation and loan interest rates are expected to stay elevated this year.

“We maintain our bottom-up stock picking strategy, however, given the current lack of sizeable foreign flows in the Philippine equity market,” BSC analysts said.

Given these financial risks, analysts expect core earnings growth of the PSEi to settle lower at 7.9 percent from 10 percent this year.

Their research showed earnings growth in the first quarter already softened in some sectors, including consumer, conglomerates, and telecommunications.

Bright spots emerge

Nevertheless, analysts said inflows of equity investments will be driven by easing local inflation.

“Locally, subdued inflation expectations amid lower global rice and crude oil prices should provide relief to consumers,” they said.

The BSC report added that the peso remained resilient against the US dollar, stabilizing prices of many imported goods.

“The Bangko Sentral ng Pilipinas’ policy easing cycle is seen to continue, with expectations of three rate cuts this year,” it said.

Last month, overall inflation declined to a five-year low at 1.3 percent as rice and fuel prices fell based on data from the Philippine Statistics Authority.

Meanwhile, the local currency closed at P55.885 per $1 on Wednesday, slightly weaker than the P55.83/$1 on Tuesday, according to the Bankers Association of the Philippines.