Category: Market Insights

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

Macroeconomy GDP growth accelerated to 6.4% in Q4, due to robust government and infrastructure spending and softer inflation. These same factors, along with a low base and positive employment print, should sustain faster growth in 2020. Robust residential and commercial building demand and the various Private-Public Partnership (PPP) projects should also further stoke investment demand. Inflation will likely stay within... Read More

Macroeconomy Recent economic indicators point to a stronger Q4 and on 2020, with positive employment print and poverty data indicating better investment numbers for the last quarter of 2019. Household consumption would still benefit from this, softer inflation (on average) and low interest rates. The National Government (NG) will continue to ramp up infrastructure spending amidst the still-large fiscal space.... Read More

Macroeconomy The PH economy has returned to the fast lane with the 6.2% GDP growth in Q3, and we expect this to accelerate to 6.5% and above by Q4, as consumer, government and investment spending get into higher gear moving forward. Low inflation, huge job gains, and low interest rates will drive more robust consumer spending, while National Government (NG)... Read More

Macroeconomy We see GDP growth accelerating to 6% in Q3 and faster in Q4, as domestic demand revs up further. With inflation holding below the 2% BSP floor in H2, and huge employment gains (supported by 2nd lowest self-rated poverty rate of 42% in Q3 as estimated by SWS), consumer spending shall show even more robust growth. Significantly lower interest... Read More