Category: Market Insights

Yield Curve Downshift Outlook. The Bangko Sentral ng Pilipinas (BSP) expects November inflation to settle within 5.8%-6.6%, starkly lower than October’s 6.7% due to the sharp decline in global oil prices, normalization of rice supply conditions, and peso appreciation. Since its peak its peak last October, global oil prices have gone down by as much as 33% while local gasoline... Read More

Equities Outlook Outlook. The 7,400 level may become PSEi’s new support amid optimism following the US-China trade war truce that will temporarily suspend the implementation of higher tariffs on $200bn worth of Chinese exports originally scheduled on Jan. 1, 2019, which helps ease concerns over slowing global growth. On the domestic front, investors await the release of the November inflation... Read More

Macroeconomy Sustained by durable equipment and construction investments and a modest rebound in exports, we see a faster GDP growth of 6.6% in Q4, accelerating further in 2019. Higher dollar remittances in Q4 should likewise support consumption and should somehow buffer the contractionary spending effect of inflation, unless the Bangko Sentral ng Pilipinas (BSP) allows significant appreciation of the peso.... Read More

Equities Outlook Outlook. The PSEi may sustain its upward trajectory amid improving domestic sentiment over slowing inflation and stronger peso. Bangko Sentral ng Pilipinas (BSP) and central banks in emerging markets (EMs) have done their share of rate hiking aimed at curbing inflation and bridging interest rate differential vs US benchmark will help ease pressure on currency. Dollar’s weakness amid... Read More

Hike Pause Outlook. We believe that the BSP is done hiking for the year especially with the Fed’s recent dovish tone and the expected easing of local inflation for the rest of the year and in 2019.The central bank’s most recent 25bps last week brought the policy rate (RRP) to 4.75% and the total hike to 175bps this year and... Read More

Growth Moderates. Philippine gross domestic product (GDP) in the third quarter of 2018 (3Q18) expanded by 6.1% year-on-year (y/y), in-line with our (house view) estimate, albeit slightly behind the upwardly revised 2Q18 GDP print and consensus of 6.2%. Growth was lifted by robust government spending and investments, but was partly offset by weaker household consumption and manufacturing, and shrinking agriculture.... Read More

Dovish Fed? Outlook. The Bangko Sentral ng Pilipinas (BSP) hiked rates by another 25bps last week, a move that was widely expected and brought the policy rate (RRP) to 4.75% and the total hike to 175bps this year. Though inflation was believed to have peaked in the third quarter this year, the hike was deemed a proactive move to stump... Read More