The Philippine economy continues to show resilience despite escalating geopolitical tensions in the Middle East, according to BPI Securities Corporation. In a report released Thursday, the firm emphasized that stable domestic supply, easing inflation, and a robust stock market are helping cushion external shocks.
BPI Securities president and CEO Mark Race stated that while the Israel-Iran conflict poses risks, the local economic outlook remains optimistic. He noted that as a net oil importer, the Philippines is vulnerable to price surges. However, inflation indicators for early Q2 suggest that pressures are moderating, particularly in food, utilities, and transport.
Lower rice prices anchor inflation outlook
Race highlighted the role of rice prices in easing consumer price pressures. He explained that rice, a staple for Filipino households, has seen a significant price decline of more than 11% year-on-year. This development, he said, is key to anchoring inflation expectations for the remainder of 2025.
“Improved domestic supply is doing much of the heavy lifting in stabilizing costs,” Race said. He added that this helps maintain household spending, which remains the backbone of the country’s economy.
Market outlook remains positive despite external risks
Turning to equities, Race pointed out that the Philippine Stock Exchange index (PSEi) is maintaining its technical support levels. The index remains above 6,300 with resistance near 6,500, showing relative strength even amid global uncertainties.
BPI Securities maintains a bullish outlook for the year, forecasting the PSEi to end 2025 above the 7,000 mark. Race attributed this to expected core earnings growth of around 8% across listed firms. He also emphasized that the Philippine market is becoming increasingly attractive to foreign investors.
“Reduced foreign participation in recent years has made local markets less susceptible to abrupt sell-offs,” he explained. “But the core strengths remain — a consumption-driven economy, sound macro fundamentals, and the potential for lower interest rates.”
BPI believes these factors present a compelling case for select foreign funds seeking growth and stability in Southeast Asia.
Jaja has a degree in journalism and took classes in international law and business communication. Her career spans roles at prominent international media outlets, including International Business Times, Celebeat and Delightful Philippines. As a news editor, Jaja covered a wide range of beats, including legal, business, economy, cryptocurrency, personal finance, gaming, technology, and entertainment.