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COUNTRY INSIGHTS

Next round of oil tax increase suspended
PHILIPPINES · In Brief · 15 Oct 2018

The Department of Finance (DoF) announced over the weekend that the executive will suspend the second round of oil tax adjustments under the TRAIN law that were supposed to come into effect in January. The adjustments involve a P2/liter increase in excise taxes imposed on fuel prices, importantly...

Inflation rises; more policy tightening expected
PHILIPPINES · In Brief · 05 Oct 2018

The headline inflation rate continued to rise, reaching 6.7% in September from 6.4% in August. The uptrend reflects a high 0.9% month-on-month inflation rate, which may be traced to higher prices of food, particularly rice, meat, fish and vegetables, and fuel-related costs, including transportati...

​Another “strong” 50bp rate hike
PHILIPPINES · In Brief · 27 Sep 2018 · 1 response

In the wake of the higher than expected August inflation and continuing monetary tightening in the U.S., the Monetary Board today raised its policy rates by another 50bp, bringing the overnight reverse repurchase (RRP) rate to 4.5%. This is the Monetary Board’s fourth successive rate hike, with i...

August inflation at 6.4%
PHILIPPINES · In Brief · 05 Sep 2018

Markets today were surprised anew by a higher than expected inflation rate – 6.4% for the month of August, rising from 5.7% in July. The headline figure exceeded even the BSP’s high-end forecast of 6.2%, as the month-on-month rate accelerated to 0.9% in August from 0.5% previously. Core inflation...

Risk-off
PHILIPPINES · Forecast · 27 Aug 2018

The past few months have proved challenging for the Philippines amidst risk-off global market conditions and a string of surprises that have led to the current mood of heightened caution. Despite robust domestic demand, economic growth slowed sharply, dragged down by net exports. Capacity const...

GDP growth slides; policy rates raised
PHILIPPINES · In Brief · 09 Aug 2018 · 1 response

After adjusting down its 1Q18 economic growth estimate from 6.8% to 6.6%, government announced today that 2Q18 GDP growth slipped to 6%, far below the median 6.8% analysts’ forecast. While the headline figure is disappointing, what is striking about the 2Q18 performance is the strength of domesti...

Inflation rises to 5.7%
PHILIPPINES · In Brief · 07 Aug 2018

July inflation rate reached 5.7%, near the upper end of the forecast ranges of the BSP (5.1-5.8%) and private analysts (5.4-5.8%); rising as well from the surprisingly high 5.2% print in June. The higher headline rate may be traced largely to higher prices of food and non-alcoholic beverages and ...

​A third rate hike in August
PHILIPPINES · In Brief · 25 Jul 2018

In a Q&A session with select analysts this afternoon, BSP Governor Nestor Espenilla told participants to expect "strong follow through" in monetary action on August 9, the next Monetary Board meeting. Asked what he meant by "strong", he replied "at least 25bps." Reasons given for the BSP’s increa...

State of the Nation Address 2018
PHILIPPINES · In Brief · 23 Jul 2018

As promised, President Rodrigo Duterte kept to his prepared speech in his third annual report to congress this afternoon. Since members of his cabinet had in past weeks presented “Pre-SONA” reports on the Duterte Administration’s Year 2 achievements, the President concentrated on outlining his ad...

Increasing internal revenue allotments
PHILIPPINES · In Brief · 12 Jul 2018 · 2 responses

It seems that the Department of Budget and Management (DBM) was as surprised as anyone by the Supreme Court’s decision yesterday on a 5-year old case involving local government units’ (LGU) share of revenues collected by the national government. Under Philippine law, local governments are entitle...

Inflation jumps anew
PHILIPPINES · In Brief · 05 Jul 2018

June inflation rate rose sharply to 5.2%, exceeding the high-end of the BSP’s forecast range (4.3% to 5.1%) for the month as well as the median analysts’ forecast (4.7%). Month-on-month inflation, which had showed signs of decelerating in April and May, jumped by 0.6% in June. Apart from seasonal...

Breaking a potentially vicious feedback loop
PHILIPPINES · In Brief · 28 Jun 2018

On Monday, the benchmark Philippine stock index fell below 7,000 into what stock analysts call bear territory. This transpired after a fortnight of turmoil in emerging markets precipitated by an escalation of the face off between the US and China on the trade front. Alongside market read of a mor...

Another rate hike
PHILIPPINES · In Brief · 20 Jun 2018

Amidst tumbling financial markets, the Monetary Board (MB) decided today to raise its set of policy rates by 25bp, its second after last month's increase. The key overnight reverse repurchase rate now stands at 3.5%. 

The BSP said that while its latest baseline inflation forecasts have shifted l...

May inflation up; but lower than expected
PHILIPPINES · In Brief · 05 Jun 2018

The headline inflation rate continued to inch up to 4.6% last month from 4.5% in April, due to a combination of higher food prices (including rice), oil-related services (particularly transport), and the impact of higher consumption taxes (particularly commodities subject to excise taxes, e.g., o...

Of deficits and rising risks
PHILIPPINES · Forecast · 28 May 2018

Amidst buoyant global growth, the domestic economy expanded strongly at the start of 2018 boosted by particularly vigorous public spending. Despite this, the local mood especially in financial markets is less than jubilant. While we think the economy’s fundamentals quite solid as affirmed by S&P...

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