In its 2026 Global Report, the World Economic Forum (WEF) highlighted geoeconomic confrontation as the top economic risk, followed by interstate conflict, extreme weather, societal polarization, and misinformation. These are the headwinds the global economy must brace for.

The WEF’s two-year outlook describes a “turbulent or stormy world.” It warns that the use of trade, investment, sanctions, and industrial policy as “strategic weapons” to constrain geopolitical rivals and consolidate spheres of influence is the trigger most likely to spark a global crisis.

Interestingly, the Davos-based think tank’s findings are in sync with the viewpoint presented by First Metro Securities Research at the Monday Circle Forum, held just prior to the WEF report’s release.

Geoeconomic confrontation and geopolitical conditions are now inextricably intertwined. In the Philippine context, First Metro Securities maps out worsening geopolitical conditions that could lead to conflict or “war”—the black swan that could wear down business confidence.

In finance, a “black swan” is an extremely negative occurrence that is nearly impossible to predict; it is unfathomable and unexpected.

Yes Virginia, I fully agree with this point of view. Additionally, however, emerging developments regarding the health of former President Rodrigo Duterte could potentially upend the country’s fragile political state, largely due to ongoing apprehensions surrounding a potential floodgate of corruption probes.

A politically savvy bank president backed my standpoint: “Given the legality of the arrest and ongoing trial, it could be a black swan.” Correspondingly, there is the question of stability within the Federal Open Market Committee, with US Fed Chairman Jerome Powell under investigation.

All of these factors will have ripple effects on macroeconomic variables moving forward. This is not to mention spillover concerns regarding macroeconomic stability, especially given the prevailing weakness of the peso and waning public trust in the government.

In the eyes of First Metro Securities, the market has already “priced in” the damage. The economy is tracking a cautious path, and its current weakness is viewed as “transitory and cyclical rather than structural.” For the corporate side, the firm anticipates a steady “muddle through” environment, though there is scope for upside should confidence and spending recover.

I agree that the momentum for economic recovery this year is “subdued,” manifested in the prevailing attack on the peso by the mighty greenback. Based on the views of several market players and bank treasurers, the peso may have difficulty holding its fort and could likely breach ₱60, barring massive intervention.

Yes Virginia, currency weakness is a sticky risk that complicates the national government’s fiscal management. From what I hear along the banking alleys, the Department of Finance is eyeing a move to frontload a good portion of its programmed ₱2.68 trillion in borrowings for the year.

Realistically, First Metro Securities acknowledges that “near- to medium-term challenges are present and risks are skewed to the downside.” Recovery hinges on the restoration of business and consumer confidence, decisive government action to address corruption, and safeguards on public finances to demonstrate a commitment to fiscal responsibility.

As the wheels of business continue to churn, I guess we can all agree: we are looking at a long, rough road to economic recovery.