Author: Marwin Nunez

Macroeconomy Q3-2020 GDP will decline but in single-digits. We expect the industrial sector to lead the nascent recovery in the following months as the government continues to relax quarantine restrictions. The construction sector, powered by infrastructure spending and private residential demand, should lead the upswing, while manufacturing should improve albeit at a slower pace. Inflation will remain steady for the... Read More

Macroeconomy Although the deep dive in Q2 which impacts also Q3 suggests full-year GDP to decline by 6.5% to 8.5%, we expect a more positive outlook for Q4 with the Philippine economy slowly recovering and milder restrictions in place starting September. Inflation will be below 2.5% as crude oil prices remain low. We also see more job recoveries and growth... Read More

Macroeconomy The PH economy will likely improve in Q4 as relaxation of strict quarantine measures kick in by mid-August. Month-on-month (m-o-m) pluses surfaced for manufacturing, capital goods imports, exports and construction, and should gain traction for the rest of the year. OFW remittances returned to positive growth in June. NG spending will increase especially for infrastructure and health. The Philippine... Read More

Macroeconomy Despite gradual relaxation of quarantine restrictions, Bangko Sentral ng Pilipinas’ (BSP) past moves to infuse more liquidity into the banking sector (and more bank lending) allow more gains in manufacturing and construction production as evidenced by the acceleration in PMI. NG spending should also pick up pace starting Q3 with available financing and the likely approval of its P1.3-T... Read More

Macroeconomy We expect GDP gains starting Q3 as Metro Manila, Calabarzon, and Central Luzon (more than 62% of GDP) get freed from most quarantine restrictions by mid-July. The downtrend in number of deaths provides support for this view. Faster pace of supply chain and transport restorations will keep food prices relatively steady, sufficient to blunt the sharp rise in crude... Read More

Macroeconomy The two months (mid-March to May) of ECQ in Luzon, including Metro Manila, shall translate into a deeper GDP decline in Q2. A return to some form of normalcy may speed up by July, when government dismantles the lockdown in most of the country, and get the economy running at a faster pace in H2. However, this may prove... Read More

Macroeconomy While we have a bit of hope of flat GDP in Q1 buoyed by exports and output in Visayas and Mindanao, the Enhanced Community Quarantine (ECQ) from mid-March to end-April in Luzon will thrust GDP growth to deep negative territory in Q2. Fortunately, crude oil prices are at 20-year lows and so inflation won’t be a concern. But getting... Read More

Macroeconomy Undoubtedly, PH GDP growth will take a big slice in Q1 thanks to COVID-19, albeit the magnitude remains uncertain. Positive prints in employment and inflation, and a 50 bps cut in policy rates by the BSP should offset some of the output loss. In addition, front-loading of infrastructure and government spending should also ease the pain. We see a... Read More

Macroeconomy The PH economy’s return to fast growth in H2-2020 should be supported by resurgent domestic demand, infrastructure and consumption. COVID-19 and Taal volcano eruption will negatively impact growth especially in Q1. Higher residential and construction of various PPP projects, along with the improvement in manufacturing activities and strong NG spending, should provide the added impetus. Fixed-Income Market BSP’s policy... Read More