A recent analysis by First Metro Securities Brokerage Corp., distributed by DBS Bank, warns that oil prices are likely to remain elevated for an extended period, even if the fragile ceasefire between the United States and Iran holds. The report suggests that structural damage to energy supply chains and persistent geopolitical risks will prevent a return to pre-conflict price levels.
"Structural damage to energy supply chains and persistent geopolitical risk premia mean that oil could settle at a higher 'new equilibrium' of about $80 to $90 per barrel," the report states.
Before the escalation of tensions on February 28, Brent crude traded around $72 per barrel. Following the conflict, prices surged past $100, briefly peaking near $120 due to disruptions in the Strait of Hormuz, a critical shipping lane for global oil supplies.
The Philippines, which imports over 96% of its crude oil from the Middle East, is particularly vulnerable to these price fluctuations. Higher oil costs have already contributed to inflation exceeding the central bank's target range of 2% to 4% in March, affecting transport, utilities, and food prices.
The research outlines a "two-path outlook" for Philippine equities, tied directly to oil price movements and geopolitical developments. If peace talks collapse, oil could spike to $100–$150 per barrel, worsening inflation and eroding purchasing power. DBS estimates that at $100 per barrel, Philippine GDP growth could decline by 0.4 percentage points, while inflation might rise by an additional 1.1 percentage points.
Conversely, a durable ceasefire could trigger a market relief rally, but only if energy pressures ease, the peso stabilizes, and inflation moderates. Under these conditions, the Bangko Sentral ng Pilipinas might adopt a less aggressive monetary policy, potentially benefiting sectors like banking and property through increased foreign investment and improved earnings visibility.
First Metro recommends focusing on large-cap stocks such as BDO Unibank Inc., Bank of the Philippine Islands, SM Prime Holdings Inc., and Manila Electric Co. However, the Philippine Stock Exchange Index, which stood at 6,611.24 before the conflict, indicates that a full market recovery remains uncertain amid ongoing economic pressures.