MB policy decision, unabated MidEast crisis depress market, peso

The Philippine Stock Exchange index (PSEi) slipped further on Thursday, closing at 5,983.81 (-0.10 percent), extending its cautious drift as investors stayed on the sidelines amid unresolved tensions between the US and Iran and ahead of the Bangko Sentral ng Pilipinas’ (BSP) policy decision, which was formally announced at 3 p.m., coinciding with the market’s close.

The central bank raised its key policy rate by 25 basis points in response to mounting inflationary pressures.

While higher rates may help contain inflation, they could also dampen economic growth in the near term, which remains weaker than expected due in part to the lingering effects of the flood control scandal on last year’s growth.

No concrete resolution

The absence of a concrete resolution to the Middle East conflict continued to cloud the outlook, particularly given its impact on global oil supply and inflation. Despite Donald Trump signaling a renewed push to end the conflict, the Strait of Hormuz remains blocked by US forces, keeping global oil prices elevated and weighing on market sentiment.

Trading activity remained subdued, with net value turnover at P5.42 billion, below the year-to-date average. Foreign investors maintained a risk-off stance, posting net outflows of P597.74 million, reflecting persistent caution.

Sector performance was mixed, indicating selective positioning rather than broad conviction. Services posted modest gains (+0.41 percent), while mining stocks led declines (-1.40 percent) despite elevated commodity prices, suggesting profit-taking.

Market remained negative

Market breadth remained negative, with decliners outnumbering advancers 102 to 92. San Miguel Corporation emerged as the top gainer (+2.56 percent), benefiting from its diversified exposure, while ACEN Corporation led losses (-3.73 percent), reflecting continued pressure on rate-sensitive and energy transition plays.

On the currency front, the peso weakened to P60.48 per US dollar from P60.13, reflecting renewed dollar strength and heightened external risks. Over the past 24 hours, the US dollar firmed as geopolitical tensions in the Middle East intensified, sustaining demand for safe-haven assets while keeping oil prices elevated.

Weakened peso, other Asian currencies

Recent reports indicate that Asian currencies, including the peso, have broadly weakened amid these developments, as disruptions in the Strait of Hormuz continue to threaten global energy flows.

At the same time, the Philippines remains particularly vulnerable to rising oil prices — with crude trading at roughly $93–$94 per barrel and Brent at around $103-$104 — due to its heavy import dependence. This increases dollar demand and widens the trade deficit, factors that structurally weigh on the peso.