Country Insights

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BOP: from negative to positive
PHILIPPINES - In Brief 17 Sep 2019
he latest balance of payments (BOP) accounts, which record residents’ transactions with non-residents for the first half of 2019, reveal quite a reversal: from net outflows of $3.3 billion in 1H18 to net inflows of $4.8 billion 1H19. The data show that this large difference, totaling $8 billion, ...

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Inflation views
PHILIPPINES - In Brief 06 Sep 2019
Government yesterday released inflation data for August showing the headline rate dropping from 2.4% in July to 1.7%, largely due to base effects as well as lower fuel and electricity prices.The latest inflation print is in line with our forecast and we reiterate here what we said in our outlook ...

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Over the hump?
PHILIPPINES - Forecast 03 Sep 2019
Domestic economic growth has slowed, and external clouds are gathering. Can GDP growth rebound to above 6%? The next 18 months will depend upon greater accommodation from fiscal and monetary policies, as well as more clarity in government reform efforts to counter the many downside risks. An...

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Another disappointing quarter
PHILIPPINES - In Brief 08 Aug 2019
When we forecasted a 5.9% GDP growth rate for 2019 at the start of the year, many commented that we were too bearish; after all, it is an election year. Now, with 2Q19 GDP growth reported at 5.5%, even lower than 1Q19’s 5.6%, were we in fact too optimistic? Latest data show a marked deceleration ...

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It’s not whether to cut or not but by how much
PHILIPPINES - In Brief 06 Aug 2019
There is speculation about the possibility that the Monetary Board (MB) is prepared to cut policy rates by 50bp this year. It seems that the question before the MB on Thursday is not whether to cut or not but how to space the 50bp over the remaining five months.In our note last month, we noted th...

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Remarks from the conference call - Duterte defined: His SONA and his legacy
PHILIPPINES - Report 26 Jul 2019
GlobalSource Partners hosted a conference call on July 24, 2019, featuring Philippine Country Analyst Romeo Bernardo. This report is a transcript of his remarks on the call, which shed light on the dynamics of the economy and provided perspective on the country's macro and political prospects. Th...

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State of the Nation Address 2019
PHILIPPINES - In Brief 22 Jul 2019
The business community should find President Rodrigo Duterte’s fourth State of the National Address (SONA) to its liking. First off, there was no mention of federalism. Second, he promised to push harder with the reform programs started under his administration, stressing especially ease of doing...

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June inflation at 2.7%
PHILIPPINES - In Brief 05 Jul 2019
The government today announced that the headline inflation rate fell from 3.2% in May to 2.7% in June, lower than what analysts expected (2.9%). Data show that lower rice and oil prices combined to pull down the June inflation rate. Following the rice tariffication law liberalizing rice trade, pr...

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A fork in the road
PHILIPPINES - Forecast 27 May 2019
Going into the second half of the Duterte administration, poll results suggest exceptional executive influence over the legislature that opens up a window which many hope would lead to initiatives that would advance the economic reform agenda, including ramping up the sovereign credit rating to g...

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Deposit reserve requirement ratio cut
PHILIPPINES - In Brief 16 May 2019
The BSP announced today a staggered reduction in the reserve requirement ratio (RRR) on bank deposits as follows: 1ppt effective on May 31, 0.5ppt on June 28, and 0.5 effective July 26. These will bring the RRR for commercial banks, currently at 18%, to 16% by the end of July. A 1ppt cut is estim...

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Election results (2)
PHILIPPINES - In Brief 15 May 2019
A reader asked us what are the implications of Monday’s election results which we outlined yesterday. Offhand, we say that they clearly give President Duterte greater control of the legislative agenda moving forward. The hope is that he will use his political capital to more forcefully back up Fi...

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Election results
PHILIPPINES - In Brief 14 May 2019 1 response
We had expected candidates allied with President Duterte to take most of the contested Senate seats in yesterday’s mid-term elections but it looks like they are slated to take all 12 seats. And while we did not think that the elections should be taken as a referendum on the President and his poli...

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Monetary Board cuts policy rates
PHILIPPINES - In Brief 09 May 2019
With 1Q19 GDP falling below the low end of government’s growth target, the Monetary Board decided today to cut its set of policy rates by 25bp, setting the overnight reverse repurchase rate at 4.5%. The decision is based on a more benign inflation outlook, with the BSP forecasting inflation to av...

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5.6% growth not unexpected (by us)
PHILIPPINES - In Brief 09 May 2019
As we had feared, GDP growth fell to 5.6% in 1Q19, below even the low end of government’s downscaled 6-7% target for the year and much lower than the 6.1% median analyst forecast. Officials were quick to point the finger at the delayed passage of government’s 2019 budget, which capped the growth ...

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April inflation lower at 3%
PHILIPPINES - In Brief 07 May 2019 1 response
Inflation continued to decelerate to 3% in April, slower than the 3.3% print in March 2018 and below the 3.1% expected by analysts. Although the headline rate fell, month-on-month inflation increased to 0.3% from nil in March, traced mainly to oil-related fuel and transport costs. In comparison, ...