The Morning View

The Bangko Sentral ng Pilipinas reported that the country posted foreign direct investments (FDI) net inflows of $8.93 billion in 2024 (+0.1% YoY) as higher net FDIs in equity capital were offset by lower net FDIs in debt instruments and reinvestment of earnings. In December alone, FDI net inflows dropped to $110 million (-85.2% YoY), the lowest in 11 years, amid heightened concerns over global trade.

Ayala Corporation (PSE Ticker: AC) achieved a foreign currency long-term issuer A- rating from the Japan Credit Rating Agency. This rating, along with a stable outlook, indicates a relatively high level of creditworthiness and would help the conglomerate’s ability to raise debt across capital markets. 

Local equities rose on the back of continued investor optimism after the within-target local inflation report. Foreign investors also returned to the market, marking net inflows of Php1.41 billion yesterday. The PSEi closed at 6,360.77 (+0.99% DoD). 

Local fixed income yields ended mixed, and the Philippine peso weakened amid uncertainties over Trump's trade policies and the sharp decrease in the Philippines' FDI net inflows in 4Q24.

On average, yields rose by 0.04 bps, with the 2Y closing at 5.85% (-1.51 bps) and the 10Y closing at 6.23% (+1.73 bps). 

The USD/PHP pair closed at 57.41 (+0.36% DoD). 

New York Federal Reserve’s Survey of Consumer Expectations showed that the year-ahead inflation expectations ticked up to 3.1% In February (Jan: 3.0%). The survey also noted that households have become increasingly worried about their financial situations, while unemployment, delinquency, and credit access expectations deteriorated.

European Central Bank (ECB) policymaker Peter Kazimir said that the ECB must remain open-minded on whether to keep cutting rates or pause amid upside risks to inflation. Kazimir added that it is appropriate to wait for data amid uncertainties over US tariffs before committing to a policy decision. 

US equities fell and US Treasury yields tumbled amid concerns about the slowdown of the US economy following Trump’s comments about the impact of tariffs. Meanwhile, the US dollar closed flat as traders awaited the release of the US consumer price index (CPI) inflation print for February this week.

The S&P 500 closed at 5,614.56 (-2.70% DoD), while the DJIA ended at 41,911.71 (-2.08% DoD).

On average, yields fell by 6.76 bps, with the 2Y closing at 3.89% (-11.50 bps) and the 10Y closing at 4.22% (-8.80 bps).

The DXY closed at 103.90 (+0.06% DoD). 

Sources: BusinessWorld, Inquirer, Philippine Star, Manila Bulletin, Businessmirror, PSE Edge, Bloomberg, CNBC, Reuters, CNN, Wall Street Journal, Financial Times, Market Watch

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