The Philippine Stock Exchange Index (PSEi) ended the week on a weaker footing, closing at 5,999.13 (-1.06%), slipping below the key 6,000 level as risk sentiment remained fragile.

Investor caution was driven by lingering concerns over the economic fallout from the Middle East conflict—particularly rising inflation and the possibility of tighter monetary policy from the Bangko Sentral ng Pilipinas (BSP).

The central bank entered its “quiet period” on Thursday ahead of next week’s monetary policy meeting, with several analysts expecting a possible rate hike in response to inflation pressures. Inflation accelerated by 1.7 percentage points in March to 4.1 percent.

However, BSP Governor Eli M. Remolona Jr. has said that monetary policy tools will only be effective if the oil price shock leads to broader price increases across goods and services.

Sentiment remained cautious despite Donald J. Trump signaling progress in peace talks between the United States and Iran, as investors remained wary of ongoing geopolitical risks.

Trading activity was subdued, with net value turnover at P5.48 billion, below the year-to-date average. Foreign investors remained net sellers, posting P1.70 billion in outflows. All sectors closed in the red, led by conglomerates, while market breadth was negative, with 100 decliners versus 86 advancers.

JG Summit Holdings, Inc. led all blue chips, gaining 2.09 percent to P26.90 on Friday, while SM Investments Corp. slid 3.79 percent to P610.00 per share.

On the currency side, the peso closed at P60.03 per US dollar, weakening slightly from P59.97, reflecting continued pressure on emerging market currencies. Recent data show USD/PHP hovering just above the 60 level, with the peso still weaker on a month-to-date basis.

The peso’s movement over the past week has been largely driven by oil-linked dollar demand and geopolitical risk. Earlier in the week, oil prices surged past $100 per barrel following the US blockade of the Strait of Hormuz, intensifying inflation concerns for oil-importing economies like the Philippines.

In the past 24 hours, however, tentative easing in geopolitical tensions—including ceasefire developments and renewed talks—has slightly softened the dollar and stabilized oil prices below peak levels, even as risks remain elevated.

Still, with the International Monetary Fund warning of slower global growth and persistent inflation risks tied to the conflict, investor sentiment remains cautious. The IMF noted that the fallout could be more severe for developing and emerging economies such as the Philippines, dampening sentiment in both the local bourse and foreign exchange markets toward the end of the week.