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COUNTRY INSIGHTS

A second term for the President?
PHILIPPINES · In Brief · 14 Aug 2014

The Philippine Constitution prohibits it, which is why when the presumptive presidential candidate of the ruling Liberal Party, Interior Secretary Mar Roxas, sent out the trial balloon last week, analysts quickly shot it down as the desperate idea of one receiving low ratings in presidential pref...

A Bend in the Road
PHILIPPINES · Forecast · 06 Aug 2014

Executive SummaryAt a time of slowing growth, rising inflation and visible signs of infrastructure constraints, an adjudged bend in the administration’s Daang Matuwid has left the President not only with reduced degrees of freedom to invigorate the economy but also dented his corruption-fighting ...

Policy rates hiked
PHILIPPINES · In Brief · 31 Jul 2014

After holding policy rates steady since October 2012, the BSP today raised its overnight borrowing and lending rates by 25 bp to 3.75% and 5.75%, respectively. It explained the rate hike as a "preemptive move" to safeguard 2015 inflation which it forecasts to reach 3.7%, near the upper end of its...

A good day for government
PHILIPPINES · In Brief · 28 Jul 2014

1. The National Government turned in a whopping 50% increase in non-interest expenditures in June, bringing the 2Q14 total up 12% over 2Q13. This is very encouraging in terms of our 2Q14 economic growth outlook. Also announced today, the President approved rehabilitation plans for areas affected ...

Chilling Effect
PHILIPPINES · Report · 17 Jul 2014

It was the first question we asked Budget Secretary Florencio Abad last December[1] and it worries us now to hear President Benigno Aquino talk about the "chilling effect" of the Supreme Court decision declaring the executive's Disbursement Acceleration Program (DAP) unconstitutional.In fact the ...

Unconstitutional
PHILIPPINES · In Brief · 01 Jul 2014

The Supreme Court today declared President Aquino's Disbursement Acceleration Fund (DAP) "partially" unconstitutional. The DAP is a mechanism adopted by the administration to boost economic growth by using unspent funds in the budget for other priority needs within the year. These funds amounted ...

Government Spending Disappoints
PHILIPPINES · In Brief · 26 Jun 2014

Early news releases report a disappointing 9% decline in government non-interest expenditues for the month of May. This followed a mere 0.5% growth in spending last month which had been attributed to seasonal slowdown during Lent. Although there is still June performance to consider, weak public ...

Policy Rate Hike?
PHILIPPINES · In Brief · 17 Jun 2014

These days, reports of price increases from rice, sugar and garlic to oil and transport fares have become daily fare in the local newspapers. Receiving the most attention is the nation’s staple food and CPI heavyweight, rice, which has been the target of government’s anti-smuggling efforts and wh...

Inflation up, truck ban lifted?
PHILIPPINES · In Brief · 05 Jun 2014

May inflation rate reached 4.5%, above the 4.2% market expection and on the higher range of the BSP's 3.9-4.7% forecast. The BSP attributed the higher price increase to "tight domestic supply conditions" including "higher spoilage during the summer months" that led to higher food prices. A few an...

V, J, or L?
PHILIPPINES · Report · 29 May 2014

With the consensus forecast pegged at 6.4%, most analysts found the 5.7% 1Q14 GDP growth announced today surprising.But not us. We have maintained a below-consensus full-year forecast of 6.1% since early this year, expecting the first two quarters to be on the weaker side given the boost from ele...

Showcasing the Philippines
PHILIPPINES · In Brief · 23 May 2014

This week, the Philippines hosted this year's World Economic Forum for East Asia to much fanfare and self-congratulating back patting. The event could not have come at a better time with the country boasting of a 7.2% GDP growth last year, "next only to China", and the S&P just the other week vou...

Chugging Along
PHILIPPINES · Forecast · 12 May 2014

Executive Summary By and large, the central scenario we drew up in our last quarterly report continues to hold, with government’s own leading economic indicator pointing to a slowdown in 1Q14 GDP growth.We are also seeing several potential drags on growth, including infrastructure bottlenecks and...

Challenging Goliath
PHILIPPINES · Report · 11 Apr 2014

Executive Summary Philippine-China relations sank to a new low last week following the Philippines’ filing of a memorial or pleading before a United Nations Convention on the Law of the Sea arbitral tribunal. The memorial was in connection with the arbitration case it initiated against China earl...

Lower Inflation
PHILIPPINES · In Brief · 04 Apr 2014

Philippine headline inflation slid further to 3.9% in March, bucking market expectations of a slight pickup to 4.2%. This serves to anchor inflation expectations further and gives local monetary authorities more room to manage its exit from loose policy settings. Given relatively tame inflation n...

Divergent
PHILIPPINES · In Brief · 27 Mar 2014

Monetary and fiscal policies have diverged with the former on a tightening track and the latter loosening up some more. Revealing its primary concern at this time, i.e., of liquidity-driven increases in risk appetites, the Monetary Board opted to raise the reserve requirement on bank deposits by ...

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