Philippine stock market investors will be mainly looking forward to the Bangko Sentral ng Pilipinas’ (BSP) policy meeting on Thursday, Aug. 27, while continuing to monitor the conflict in the Middle East, which has recently been causing oil prices to rise and the peso to weaken.

“With no end in sight, tensions between the United States (US) and Iran are expected to remain hanging above market sentiment. Especially as global oil prices continue their climb, in turn, setting up higher inflation expectations at home,” said Philstocks Financial Inc. research manager Japhet Tantiangco.

On the domestic front, he said, “The BSP is seen to be at a critical juncture as they balance elevated inflation against slowing economic growth in their policy decision. The uncertainties in their policy direction may also weigh on the market.”

“We expect the BSP to hold its policy rate steady at 4.75 percent on the Aug. 27 meeting, a view that aligns with growing consensus. While several global peers are refining their easing timelines, we note that local policymakers still operate with thinner safety margins,” said online brokerage 2TradeAsia.com.

It explained that inflation faces an upward bias in August from higher pump prices and weather-related food basket disruptions. Combined with the weak peso and ongoing food-supply volatility, “the room for early rate cuts looks extremely limited for now.”

In contrast, Union Bank of the Philippines’ (UnionBank) MktsFocUs said, “The central bank is widely expected to deliver another 25-basis=point (bp) rate hike on the 27th, reinforcing its anti-inflation credentials while supporting the peso amid elevated external risks.”

“The bigger uncertainty lies in the post-Monetary Board (MB) guidance. Even if policymakers pause thereafter, it should not be mistaken for a dovish pivot,” it added, noting that oil prices could resume their ascent and drag down the peso while swings in the dollar index and US Treasury yields remain key drivers.

“At the same time, weather-related food inflation, potential El Niño disruptions, and wage pass-through effects continue to pose upside risks to prices,” UnionBank said.

Tantiangco said if the peso’s weakness persists and local treasury yields remain elevated, these will pose a challenge to the market.

In this environment, 2TradeAsia.com said, “Cement, construction, and discretionary retail face the clearest operational headwinds, while consumer staples, power distribution, and telecom infrastructure should prove more resilient on volume.”

“We prefer rotating out of capital-intensive cyclicals and weather-exposed retail names into cash-generative, high-dividend stocks; particularly, power utilities, telecom operators, and top-tier REITs [real estate investment trusts] whose yields still sit above sovereign bond rates,” it said.

For its part, UnionBank recommends “balancing defensive sectors with selective exposure to oversold cyclicals where valuations have become more attractive. Banks, selected property companies, and diversified conglomerates could participate in tactical rebounds, while defensive position favors telecommunications firms, utilities, and quality holding companies continue to provide earnings stability. Mining and special situations remain areas of interest.”

For stock picks, Abacus Securities Corp. has a BUY rating for Puregold Price Club Inc. after its first-half figures came in ahead of consensus and “the outlook remains resilient with management already providing early indications of third-quarter 2026 being similar to the first-half results so far.”