RISING oil prices and continued pressure on the peso could weigh on Philippine equities in the coming weeks, with the possibility of a twin interest rate hike by the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) adding to investor concerns.
In its weekly outlook, 2TradeAsia.com said it remained cautious on the local stock market amid heightened geopolitical risks and the possibility of further monetary tightening.
The brokerage expects the Fed to raise interest rates on Dec. 9, followed by another BSP rate hike on Dec. 17, a scenario that could keep borrowing costs elevated and weigh on interest-rate-sensitive companies.
The Federal Open Market Committee kept its benchmark interest rate unchanged at 3.75 to 4 percent in its latest policy meeting, but 2TradeAsia said the decision did not rule out another increase before the year ends.
It also flagged the combination of a weakening peso and higher oil prices as a concern for the domestic economy, as both could push up the cost of imported fuel and food and add to inflationary pressures.
The research firm noted that the peso continued to weaken against the US dollar despite the BSP’s 50-basis-point rate increase, while geopolitical developments involving the United States and Iran could keep crude oil prices elevated heading into the holiday season.
US President Donald Trump’s renewed warnings of possible military strikes against Iran after the Nov. 3 US midterm elections have added to concerns over potential disruptions to global oil supplies.
Against this backdrop, 2TradeAsia advised investors to remain selective, favoring companies with dollar-denominated earnings and strong capital positions while avoiding rate-sensitive and budget-exposed stocks.
It also recommended reducing exposure further if the Philippine Stock Exchange index (PSEi) closes below the 5,600 level and adding positions only if the benchmark sustains a close above 5,800 after the Fed’s policy decision.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., likewise pointed to inflation concerns and geopolitical developments as factors weighing on local equities.
In his assessment of Friday’s market performance, Ricafort said the PSEi fell 23.23 points, or 0.4 percent, to 5,680.35 on Oct. 30, its lowest level in about two weeks and close to levels last seen in November 2025.
He attributed the decline partly to the BSP’s higher October inflation forecast of 7.1 to 8.1 percent, following September’s 7.2-percent inflation rate, which raised the possibility of additional rate increases.
He said further monetary tightening could increase financing and borrowing costs for listed companies, adding pressure to their earnings and investment plans.
Ricafort also cited rising global crude oil prices, with Brent crude reaching around $116 per barrel on Oct. 30, among its highest levels in six months, amid concerns over a possible resumption of US military action against Iran.
For the week, the PSEi declined 48.28 points, or 0.8 percent, extending its losses to a second consecutive week. However, its October performance was nearly flat, rising by 0.87 point, or 0.02 percent, following two consecutive months of declines.
Foreign investors remained net sellers, although the pace of selling eased.
Ricafort reported net foreign selling of $5.1 million for the week, significantly lower than the $144.1 million recorded in the previous trading week.
On Oct. 30 alone, foreign net selling narrowed to $70,000 from $1.6 million in the preceding session.
Despite the external risks, Ricafort identified some potential sources of support for local financial markets, including the recent affirmation of the Philippines’ credit ratings by Japan Credit Rating Agency, Moody’s Ratings and Rating and Investment Information Inc.
He also cited JPMorgan Chase & Co.’s planned inclusion of Philippine government bonds in its Emerging Market Local Bank Index starting Jan. 29, 2027, which could encourage additional foreign investment in the domestic debt market.
For the PSEi, Ricafort placed initial support at the psychological 5,600 level, with the index’s November 2025 low of 5,584.35 serving as another important support level.
He identified resistance levels at 5,780 to 5,915, with stronger resistance at 6,025 to 6,135.
“Investors will also monitor the release of domestic economic indicators this week, particularly October inflation data on Nov. 6, alongside manufacturing activity, bank lending, employment and other economic figures,” Ricafort said.
“The next BSP policy meeting is scheduled for Dec. 17, while developments in US monetary policy and the Middle East will remain important external factors for the local market.”
