Global and Philippine Market Update

April 24 to April 30, 2025

Global Markets 

Global Stocks extended their rally, buoyed by investor tariff optimism and positive corporate earnings.

• The U.S stock market extended its rally for the sixth consecutive session buoyed by robust corporate earnings and optimism surrounding tariff relief measures. The Dow Jones climbed by 0.8% and the Nasdaq and S&P 500 each advanced by 0.6%, marking significant gains over the past week. Investor sentiment was bolstered by easing tariff burdens, particularly for automakers, and strong earnings report.
  
  
• On April 29, President Trump signed executive orders providing temporary tariff relief to U.S. automakers by mitigating compounded effects of his administration’s auto tariffs. This directive prevented the “stacking” of tariffs, ensuring that vehicles and auto parts subject to the 25% auto tariffs are not additionally taxed under separate levies such as those on steel and aluminum. He also introduced a temporary rebate system. Automakers assembling vehicles in the US are eligible to claim an offset worth up to 3.75% in the first year, decreasing 2.5% in the second year, and eliminating in the following year.
  
  
• Trade tensions between the United States and China continue to escalate as President Xi’s administration is actively engaging in global diplomatic campaign to portray the US under President Trump as unreliable and a bullying trading partner. This initiative aims to dissuade other nations from entering into trade agreements with the US. Beijing is positioning itself as a defender of the global rules-based order, while emphasizing its economic resilience and military strength. Despite China's efforts, many U.S. allies remain cautious about aligning too closely with Beijing due to concerns over China's territorial disputes and support for Russia.

Philippine Stocks

Philippine Stocks  edged higher amid tariff uncertainty.

• The PSEi closed marginally higher week on week even as investors traded cautiously amid lingering uncertainties caused by the US-ignited global trade frictions. Improved market sentiment can be attributed to the strengthening of corporate fundamentals, the Philippine peso’s appreciation against the U.S. dollar, and optimism surrounding the prospects of a U.S.-Philippine trade agreement. On Tuesday, May 6, senior Philippine officials, led by Trade Secretary Roque, are set to travel to Washington, D.C. to address the 17% reciprocal tariff imposed by the Trump administration on Philippine exports. The delegation's primary objective is to negotiate the reduction of U.S. tariff rates on Philippine goods to zero.
  
  
• Fitch Ratings has affirmed the Philippines’ investment grade rating, as well as the long-term foreign currency issuer default rating at “BBB” with a stable outlook, reflecting the country’s strong medium-term growth prospects and minimal exposure to global trade tensions. The rating indicates low default risk and an adequate capacity to meet financial commitments. Fitch projects the Philippine economy to grow by 5.6% in 2025, driven by substantial public infrastructure investments, robust services exports, and remittance-supported private consumption. While this growth is slightly below the government’s 6-8% target, Fitch anticipates real GDP expansion to exceed 6% in the medium term, supported by structural reforms and public-private partnerships. The country’s relatively closed economy, and lower reciprocal tariffs compared to regional peers, provides some insulation from global trade uncertainties.

Philippine Bonds

Philippine Bond yields showed mixed as market stays volatile.

• Yields on Philippine government securities were mixed amid heightened market volatility driven by global trade tensions and the recent P300B issuance of 10-year Treasury bonds. Short-term T-bills saw varied movements, with the 91 and 364 day increasing by 4.25 and 5.21bps to 5.4558% and 5.7362% respectively. The 182-day T-bill decreased by 2.19 bps to 5.6089%. Medium-term bonds experienced declines across all tenors, with yields on the two- to seven-year bonds dropping between 1.06 and 1.78 bps. In contrast, long-term yields were mixed; the 10- and 20-year bonds rose by 3.91 and 0.28 bps to 6.3404% and 6.3217%, respectively, whereas the 25-year bond slightly decreased by 0.06 bp to 6.3178%. Analysts anticipate that GS yields may continue to move sideways in the near term, influenced by developments in U.S. Treasury yields and upcoming domestic bond auctions.
  
  
• The Philippine government successfully raised P30 billion through the reissuance of seven-year Treasury bonds, with total bids reaching P55.222 billion, nearly double the offer. The bonds, which have a remaining life of five years and two months, were awarded at an average rate of 5.943%, slightly higher than the previous auction. The uptick in yield was attributed to the recent issuance of 10-year benchmark Treasury notes, which siphoned off liquidity from the financial system. Despise the increase, the awarded yield remained below the prevailing PHP BVAL rate which promoted the BTr to fully award the offer.

WD Guidance: Uncertainty leads to downside risks, but diversification and a long-term investment horizon still provide the best chance for financial success.

Sources: (1) https://www.bworldonline.com/stock-market/2025/04/29/669205/pse-index-inches-higher-amid-tariff-uncertainty/, (2) Fitch Ratings affirms PHL ‘BBB’ rating - BusinessWorld Online, (3) https://www.bworldonline.com/banking-finance/2025/04/30/669210/t-bond-yields-inch-up-after-jumbo-10-year-issue/, (4) https://www.bworldonline.com/banking-finance/2025/04/28/668581/govt-debt-yields-mixed-as-market-stays-volatile/ (5) https://blinks.bloomberg.com/news/stories/SVHJ9IT0AFB4 (6) https://www.investopedia.com/dow-jones-today-04292025-11723943 (7) https://www.msn.com/en-us/news/world/xi-is-trying-to-turn-world-against-us-as-trump-cuts-deals/ar-AA1DPIrC?ocid=BingNewsSerp

Disclaimer: The purpose of this article is to inform and should not be taken as an advice or offer to purchase securities. Seek professional advice before making a decision based on this presentation. Information given does not represent the views of FWD and its agents and employees.