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COUNTRY INSIGHTS

August inflation back above 5%
PHILIPPINES · In Brief · 05 Sep 2023

Analysts had expected a higher inflation rate for August but the actual number, 5.3%, exceeded the median 4.9% forecast. The relatively sharp 1.1% month-on-month increase in prices can be traced largely to the 2.4% rise in food prices, reflecting notably a 4.9% increase in rice prices, the first ...

Losing momentum
PHILIPPINES · Forecast · 28 Aug 2023

We are nudging down our forecast for this year from 5.5% to 5.2%. We had expected consumption to slow down as pent-up demand eased and inflation erodes purchasing power, but the government’s considerable 2Q spending underperformance was a surprise. Also, here as elsewhere, Chinese tourism disappo...

Still on pause
PHILIPPINES · In Brief · 17 Aug 2023

As expected, the Monetary Board maintained policy settings for the third time, keeping the key overnight rate at 6.25%. In his first policy press conference, BSP Governor Eli Remolona reiterated that the authorities remain prepared to resume tightening if the need arises. After tweaking downwards...

Q2 GDP slows to 4.3%
PHILIPPINES · In Brief · 10 Aug 2023

We had expected economic growth to decelerate after Q1’s relatively robust 6.4% yoy expansion but the marked slowdown to 4.3%, reflecting a 0.9% seasonally-adjusted qoq contraction, is a surprise. Production numbers, from which GDP is estimated, showed lower growth rates in the three major sector...

July inflation eases to 4.7%
PHILIPPINES · In Brief · 04 Aug 2023

The Philippine Statistics Authority reported today continuing downtrend in the headline inflation rate to 4.7% in July from 5.4% in June and a high of 8.7% in January. The headline rate reflects a slowdown in the month-on-month increase in the CPI and is well within the BSP’s 4.1% to 4.9% forecas...

Marcos 2.0: Year 2 to-dos
PHILIPPINES · In Brief · 23 Jul 2023

When Ferdinand Marcos, Jr. assumed power at the end of June last year, we listed five areas where the new administration needed to take fire-fighting stances to speed up post-pandemic recovery. These were: (a) battling inflation and putting fiscal consolidation on more solid footing to ensure mac...

June inflation eases
PHILIPPINES · In Brief · 05 Jul 2023

Highlights from today’s inflation report are as follows: The headline inflation rate continued to trend down to 5.4% in June from 6.1% the previous month and a high of 8.7% in January. Compared with the February to May months when month-on-month inflation rates were at zero or negative, June mont...

Former BIS / US Fed executive and Economics Professor named BSP governor
PHILIPPINES · In Brief · 23 Jun 2023

We expect financial markets here and abroad to welcome the appointment of Eli Remolona as BSP Governor. Currently a member of the Monetary Board, he will assume the governorship on July 3. As we wrote in our latest Forecast report, Mr. Remolona is preeminently qualified for the job having spent 1...

No change in monetary policy settings
PHILIPPINES · In Brief · 22 Jun 2023

There were no surprises in today’s Monetary Board meeting. Authorities decided to keep interest rates steady, maintaining the key overnight policy rate at 6.25%. The BSP’s inflation outlook showed price increases easing over the medium-term. There were slight tweaks to the forecasts, with inflati...

BSP cuts reserve requirement ratio
PHILIPPINES · In Brief · 09 Jun 2023

The BSP today announced reductions in banks’ reserve requirement ratios (RRR) to be implemented starting June 30. As we had expected, the reduction will coincide with the expiration of a pandemic response measure that allowed loans to small firms to be counted as part of reserves. The BSP emphasi...

Growing pains
PHILIPPINES · Forecast · 07 Jun 2023

With his high popularity ratings intact, President Ferdinand Marcos, Jr. steps into his second year in office with another advantage: the business sector has become more at ease with his leadership style. However, he will have a tougher challenge growing the economy. Locally, GDP growth has slo...

Key policy rate held at 6.25%
PHILIPPINES · In Brief · 18 May 2023

After raising its set of policy rates by 425bp since May last year, the Monetary Board decided today to pause monetary tightening, keeping the overnight RRP rate at 6.25%. The decision is based on the BSP’s forecast of a gradual decline in inflation to target by 4Q, inflation expectations for 202...

Q1 GDP grew 6.4%
PHILIPPINES · In Brief · 11 May 2023

It was a good start for the Philippine economy, growing 6.4% in Q1 2023 and beating analysts’ median forecast of 6.1%. A quick look at the numbers suggests that pandemic-induced pent-up demand is still the major driver. The 6.3% growth in private consumption, which accounted for 3/4s of GDP growt...

April inflation below expectations
PHILIPPINES · In Brief · 05 May 2023

Food prices continued to fall for the third straight month, pulling down the headline inflation rate from a peak of 8.7% in January to 6.6% in April. As in February and March, April inflation was below analysts’ 7% median forecast. Aside from food prices, which partly reflects seasonal factors (e...

Infrastructure, anyone?
PHILIPPINES · In Brief · 27 Apr 2023

In Washington for the World Bank / IMF Spring meetings earlier this month, the country’s economic managers turned the spotlight on infrastructure opportunities in the Philippines under the Marcos administration. In a half-day briefing that focused on the economy’s macro fundamentals and investmen...

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