BPI: PH market resilient amid geopolitical risks

BPI Securities Corporation said the Philippine economy continues to demonstrate resilience despite rising geopolitical risks in the Middle East, citing stable inflation and improving domestic supply conditions as key stabilizing factors.

In a report released Thursday, BPI Securities President and CEO Mark Race acknowledged the potential risks posed by renewed tensions between Israel and Iran but maintained a cautious optimism.

“Tensions between Israel and Iran undoubtedly pose risks to the global economy,” Race said. “As a major oil importer, the Philippines is exposed to price shocks. However, we take a measured view—year-to-date, the key inflation drivers for the early second quarter reflect moderation, particularly in food and utility costs, and easing transport prices.”

Race emphasized that improved rice supply has been a major contributor to moderating inflation. “Year-on-year rice prices are down by more than 11%, and that has a meaningful impact on overall inflation expectations for the rest of the year,” he added.

On the equities side, Race noted that despite external pressures, the Philippine Stock Exchange index (PSEi) has remained technically supported.

“We continue to trade above the 6,300 level, with 6,500 acting as immediate resistance. Over the next two weeks, we expect the PSEi to remain within this band. However, our longer-term outlook is constructive—we maintain our year-end target of over 7,000, underpinned by projected core earnings growth of 8%,” Race said.

He also pointed out that declining foreign holdings in local equities have helped reduce market volatility. “The Philippines is a consumption-driven economy with strong fundamentals. Combined with the possibility of lower interest rates, this remains a compelling proposition for select foreign funds,” he said.

BPI Securities continues to monitor key global and domestic developments as it maintains a cautiously optimistic outlook for the rest of the year.