Tuesday September 10 2019
Philippines Trade Gap Narrows in July
National Statistics Office of Philippines l Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The Philippine's trade deficit narrowed to USD 3.39 billion in July of 2019 from USD 4.02 billion in the same month a year earlier, as exports rose while imports fell.

Year-on-year, exports rose by 3.5 percent to USD 6.17 billion, after an upwardly revised 3.3 percent gain in the previous month. It was the fourth straight month of increase in exports, and the fastest growth in nine months, as sales advanced for gold (81.8%), bananas (34.6%), machinery and transport (23.9%), electronic equipment and parts (18.9%); ignition wiring set and other wiring sets used in vehicles, aircraft and ships (17.6%); other mineral products (7.9%), other manufacture goods (5.7%).  Also, sales of electronic products, the country's the country's top exports, rose by 2.9 percent. In contrast, sales fell for metal components (-11.8%); chemicals (-2.5%).

 Among the Philippines' major trading partners sales advanced to the US (8.9%), China (8.5%), South Korea (49.8%), Japan (8.3%), Netherlands (25.3%), and the EU countries (6.6%). Conversely, exports contracted to, Singapore (-7.3%), Taiwan (-9.3%), Hong Kong (-2.1%), Germany (-3.7%), Thailand (-4.9%), and the ASEAN countries (-9.2%). Considering January to June, exports edged down 0.1 percent from the same period of 2018.

Imports dropped by 4.2 percent to USD 9.57 billion in July 2019, following a 10.4 percent fall in the prior month. This was the fourth consecutive month of yearly decline in inbound shipments, of which iron & steel (-35.8%); mineral fuels, lubricants (-14.5%); transport equipment (-12.0%); telecommunication equipment and electrical machinery (-2.4%); industrial machinery and equipment (-1.5%). By contrast, inbound shipment rose for: miscellaneous manufactured articles (18.9%); other food and live animals (12.3%), cereals & cereal preparations (6.0%); electronic products (1.2%), and plastics in primary and non-primary form (0.5%).  

Purchases declined from Japan (-2.7%), South Korea (-16.3%), the US (-5.9%), Thailand (-18.6%), Indonesia (-9.3%), Taiwan (-11.4%), and the EU (-6.3%). Purchases from China, the Philippines's largest supplier of imports, jumped 14.8 percent. Also, arrivals increased from Singapore (32.2%), Hong Kong (23.5%), Malaysia (13.7%), and the ASEAN countries (3.0%). Regarding January to July 2019, imports fell by 1.5 percent from the same period the prior year.

Considering the first seven months of the year, exports edged up 0.1 percent from a year earlier while imports declined 1.5 percent, recording a USD 22.29 billion trade gap.




Thursday September 05 2019
Philippines Inflation Rate at Near 3-Year Low of 1.7%
Philippine Statistics Authority l Chusnul Ch Manan| chusnul@tradingeconomics.com

The Philippines' annual inflation rate fell to a near three-year low of 1.7 percent in August 2019 from 2.4 percent in the previous month but above market expectations of 1.8 percent. Food inflation reached its lowest in nearly four years while housing inflation slowed and transport prices fell.

Year-on-year, prices of food and non-alcoholic beverages increased by 0.6 percent in August, slowing markedly from a 1.9 percent rise in July. It was the lowest food inflation since October 2015, owing to prices of rice which posted its biggest slump so far this year (-5.2 percent), amid a supply surge after volume limits for imported rice were removed with the Rice Tariffication Law that was enacted last February. Prices also fell for corn (-3.7 percent), sugar, jam, honey (-2.9 percent), and vegetables (-1.4 percent). Conversely, cost rose further for food products, N.E.C (6.6 percent); meat (3.5 percent); other cereals, flours, cereal preparation, bread, pasta and other bakery products (3.2 percent); fish (2.8 percent); meat (2.5 percent); and oils & fats (1.8 percent).

Also, inflation eased for housing, water, electricity, gas and other fuels (1.8 percent vs 2.2 percent); health (3.1 percent vs 3.2 percent); recreation and culture (1.8 percent vs 3.2 percent), and restaurant and miscellaneous goods and services (3.2 percent vs 3.3 percent). In addition, transport prices fell (-0.2 percent vs 0.7 percent).

Meanwhile, prices rose faster for both alcoholic beverages and tobacco (10.1 percent vs 8.8 percent) and education (4.6 percent vs 4.2 percent). At the same time, inflation was steady for communication (at 0.3 percent) and furnishing, household equipment and routine maintenance (at 2.9 percent).

On a monthly basis, consumer prices rose by 0.2 percent in August, easing from a 0.3 percent gain in July. Prices declined for housing & utilities (-0.3 percent) and transport (-0.1 percent). On the other hand, prices increased for food & non-alcoholic beverages (1.5 percent); health (0.2 percent); education (0.4 percent); clothing & footwear (0.3 percent) and recreation & culture (0.2 percent).





 





Thursday August 08 2019
Philippines Cuts Policy Interest Rate to 4.25%
Bangko Sentral ng Pilipinas | Joana Ferreira | joana.ferreira@tradingeconomics.com

The central bank of the Philippines lowered its overnight reverse repurchase facility by 25bps to 4.25 percent during its August meeting, saying inflation expectations have moderated further amid weakening global growth. Meanwhile, data showed the country's economic growth slowed to an over four-year low in the second quarter of the year. Policymakers also noted that the benign inflation outlook provides room for a further reduction in the policy rate.

Bangko Sentral ng Pilipinas policy statement:

At its meeting on monetary policy today, the Monetary Board decided to cut the interest rate on the BSP’s overnight reverse repurchase (RRP) facility by 25 basis points (bps) to 4.25 percent. Accordingly, the interest rates on the overnight deposit and lending facilities were reduced to 3.75 percent and 4.75 percent, respectively.

The Monetary Board’s decision is based on its assessment that price pressures have continued to ease since the previous meeting. Latest baseline forecasts of the BSP indicate that inflation remains likely to settle within the inflation target of 3.0 percent ± 1 percentage point for 2019 up to 2021. Inflation expectations have also moderated further to levels consistent with the inflation target based on the BSP’s survey of private sector economists. Moreover, the risks to the inflation outlook continue to be seen as broadly balanced for 2019 and 2020, while they are seen to tilt to the downside for 2021. Weaker global economic prospects continue to temper the inflation outlook. The potential adverse effects of a prolonged El Niño episode to inflation have subsided.

The Monetary Board noted that prospects for global economic activity are likely to remain weak amid sustained trade tensions among major economies. Domestically, the outlook for growth continues to be firm on the back of a projected recovery in household spending and the accelerated implementation of the government’s infrastructure spending program, after the delay in expenditures due to the legislative impasse in the approval of the budget in January to April 2019.

On balance, therefore, the Monetary Board believes that the benign inflation outlook provides room for a further reduction in the policy rate as a pre-emptive move against the risks associated with weakening global growth. Going forward, the BSP will continue to monitor price and output conditions to ensure that monetary policy remains appropriately supportive of sustained non-inflationary economic growth over the medium term.




Thursday August 08 2019
Philippines Q2 GDP Annual Growth Weakest in Over 4 Years
Philippine National Statistical Coordination Board l Chusnul Ch Manan| chusnul@tradingeconomics.com

The Philippines economy expanded 5.5 percent year-on-year in the second quarter of 2019, slowing from a 5.6 percent growth in the previous quarter and below market consensus of 5.9 percent. This was the weakest growth rate since the first quarter 2015, as both private consumption and government spending eased, while fixed investment shrank.

In the three months to June, government expenditure went up 6.9 percent, slower than a 7.4 percent expansion in the first quarter. Also, household consumption expanded 5.6 percent year-on-year, slower than a 6.1 percent increase in the first quarter of 2019. 
 
In addition, fixed capital formation shrank 4.8 percent, following a 6.4 percent growth mainly due to a fall in durable equipment (-13.0 percent from 6.1 percent). In addition, output slowed in construction (2.6 percent from 6.4 percent); and breeding stocks & orchard development (3.6 percent from 3.8 percent). Meanwhile, intellectual property products rose faster (28.7 percent from 14.0 percent).
 
Regarding net trade, exports increased by 4.4 percent (vs 5.7 percent in Q1), of which sales of goods (4.6 percent) and services (3.8 percent); while imports showed no growth (vs 8.6 percent in Q1), as purchases of goods fell (-0.2 percent) while that of services increased (1.5 percent).
 
On the production side, the industry sector grew 3.7 percent, slowing from a 4.8 percent gain in the preceding quarter, with manufacturing output advancing at a softer pace (4.0 percent from 4.9 percent in Q1) while output declined in construction (-0.6 percent from 5.4 percent). Meanwhile, output expanded faster for electricity, gas & water supply (7.5 percent from 3.1 percent); and mining & quarrying (15.0 percent from 4.7 percent). Meantime, agriculture, hunting, forestry & fishing expanded 0.6 percent, after increasing by 0.7 percent in the previous period.
 
Meanwhile, the services sector advanced 7.1 percent, accelerating from a 6.8 percent growth in the previous period. Output increased faster in trade & repair of motor vehicles, motorcycles, personal & household goods (8.5 percent from 7.3 percent); real estate (4.0 percent from 3.7 percent); and other services (7.8 percent from 5.3 percent). By contrast, growth slowed for public administration & defense, compulsory social security (8.0 percent from 9.7 percent); financial intermediation (9.2 percent from 10.2 percent); and transport, storage & communication (5.5 percent from 7.6 percent).

On a quarter-on-quarter seasonally adjusted basis, the GDP advanced 1.4 percent, following a downwardly revised 0.6 percent expansion in the previous quarter.





Thursday August 08 2019
Philippines Economy Expands 1.4% QoQ in Q2
PSA l Rida Husna | rida@tradingeconomics.com

The Philippines GDP advanced 1.4 percent quarter-on-quarter in the three months to June of 2019, following a downwardly revised 0.6 percent growth in the previous period. The service sector grew faster, while there was an upturn in both the industry sector and agriculture, hunting, forestry and fishing activities.

The service sector expanded 1.9 percent in the June quarter, after a 1.7 percent increase in the preceding quarter. This was the strongest increase in services activity in 2-1/2 years, mainly driven by trade, other services and financial intermediation. In addition, industry sector grew by 0.7 percent, shifting from a 0.8 percent decline in the March quarter, supported by manufacturing output, electricity, gas and water supply and mining & quarrying. Also, agriculture, hunting, forestry and fishing increased 0.3 percent, following a 0.6 percent fall in the previous period, with main contributions coming from agricultural activities and services, other crops, and livestock. 

Year-on-year, the economy advanced 5.5 percent in the second quarter, the weakest annual growth rate since the March quarter 2015, and after a 5.6 percent expansion in the prior quarter.




Wednesday August 07 2019
Philippines Posts Smallest Trade Gap in 15 Months
National Statistics Office of Philippines l Chusnul Ch Manan | chusnul@tradingeconomics.com

The Philippine's trade deficit narrowed to USD 2.47 billion in June of 2019 from USD 3.55 billion in the same month a year earlier. This was the smallest trade gap since March last year, as exports rose while imports tumbled.

Year-on-year, exports rose by 1.5 percent to USD 6.01 billion, after a 1 percent gain in the previous month. It was the third straight month of increase in exports, and the fastest growth, as sales advanced for  cathodes & sections of cathodes, of refined copper(41.7%); bananas (24.4%);  ignition wiring set and other wiring sets used in vehicles, aircrafts and ships (17.6%); gold (10.1%); machinery and transport equipment (3.0%), and other mineral products (1.1%). Also, sales of electronic products, the country's the country's top exports, rose by 4.3 percent. In contrast, sales fell for metal components (-11.0%); other manufactured products (-5.7%), and coconut oil (-0.9 percent).

Among the Philippines' major trading partners sales advanced to the US (9.2%), China (5.7%), South Korea (59.9%), Japan (2.0%), and Thailand (0.3%). Conversely, exports contracted to, Singapore (-14.4%), Taiwan (-17.4%), Netherlands (-8.2%), Hong Kong (-9.9%), Germany (-0.3%), the EU countries (-3.5%), and the ASEAN countries (-4.4%). Considering January to June, exports fell 0.8 percent from the same period of 2018.  
 
Imports plunged by 10.4 percent to USD 8.48 billion in June 2019, following a downwardly revised 5.2 percent fall in the prior month. This was the third straight month of yearly decline in inbound shipments, as shrank for iron & steel (-40.3%); cereals & cereal preparations (-29.4%); industrial machinery and equipment (-20.7%); plastics in primary and non-primary form (-16.4^);  transport equipment (-12.6%); telecommunication equipment and electrical machinery (-12.2%); and mineral fuels, lubricants (-7%); other food and live animals (-6.7%), and miscellaneous manufactured articles (-0.1%). In contrast, imports of electronic products rose 1.8%.
 
Purchases from China, the Philippines's largest supplier of imports, contracted 3.8 percent. Also, arrivals fell from Japan (-9.2%), South Korea (-24.3%), the US (-4.2%), Thailand (-26.1%), Singapore (-6.4%), Indonesia (-16.9%), Taiwan (-28.5%), and the ASEAN countries (-7.4%). Conversely, purchases grew from Hong Kong (10.1%), Malaysia (36.5%), and the EU (3.4%). Regarding January to June 2019, imports fell by 1 percent from the same period the prior year.
 
Considering the first half of the year, exports fell 0.8 percent from a year earlier while imports declined at faster 1.0 percent, recording a USD 19 billion trade gap.
 
 
 



Tuesday August 06 2019
Philippines Inflation Rate Hits 2-Year Low of 2.4%
PSA l Rida Husna | rida@tradingeconomics.com

The Philippines' annual inflation rate fell to a two-year low of 2.4 percent in July 2019 from 2.7 percent in the previous month and in line with market expectations. Food inflation reached its lowest in nearly three years and there was a noticeable slowdown in prices of both housing and transport.

The central bank set an inflation target range of between 2 to 4 percent from 2018 to 2020.

Year-on-year, prices of food and non-alcoholic beverages increased by 1.9 percent in July, slowing markedly from a 2.7 percent rise in June. It was the lowest food inflation since September 2016, amid falls in prices of corn (-3 percent), rise (-2.9 percent), bread and cereals (-1.5 percent), and sugar, jam, honey (-1.4 percent); while prices rose further for food products, n.e.c (6.7 percent); fruits (6.6 percent); fish (3.8 percent); meat (3.5 percent); vegetables (3.4 percent);ther cereals, flours, cereal preparation, bread, pasta and other bakery products (3.3 percent); milk, cheese and egg (2.4 percent); and oils and fats (2.5 percent).

In addition, prices eased for and alcoholic beverages and tobacco (9.3 percent vs 9.5 percent in June); housing, water, electricity, gas and other fuels (2.2 percent vs 3 percent); health (3.2 percent vs 3.7 percent); transport (0.7 percent vs 1.6 percent); and furnishing, household equipment and routine maintenance (2.9 percent vs 3.1 percent). At the same time, inflation was steady for communication (at 0.3 percent), recreation and culture (at 3.2 percent), and restaurant and miscellaneous goods and services (at 3.3 percent), while cost of education rebounded sharply (4.2 percent vs -4.5 percent). 

On a monthly basis, consumer prices rose by 0.2 percent in July, after a 0.1 percent gain in June. Prices advanced for alcoholic beverages and tobacco (0.8 percent); clothing and footwear (0.4 percent); furnishing, household equipment and routine maintenance (0.3 percent); health (0.4 percent); recreation and culture (0.1 percent); education (2.1 percent), and restaurants & miscellaneous goods and services (0.3 percent). Meantime, cost was flat for both food and non-alcoholic beverages; and housing, water, electricity, gas and other fuels, while, cost of transport dropped (-0.3 percent).


Wednesday July 10 2019
Philippines Trade Gap Narrows in May
National Statistics Office of Philippines l Chusnul Ch Mana | chusnul@tradingeconomics.com

The Philippine's trade deficit narrowed to USD 3.28 billion in May of 2019 from USD 3.88 billion in the same month a year earlier, as exports increased while imports declined.

Year-on-year, exports rose by 1.0 percent to USD 6.15 billion, unchanged from an upwardly revised figure in April. It was the second straight increase in exports, as sales advanced for copper concentrates (192.1%); ignition wiring set and other wiring sets used in vehicles, aircrafts and ships (31.7%); bananas (28.6%); chemicals (20.1%); metal components (14.0%), gold (8.3%), and other mineral products (7.0%). Also, sales of electronic products, the country's the country's top exports, increased by 6.2 percent. By contrast, sales fell for machinery and transport equipment (-59.2%); and other manufactured products (-5.4%).

Among the Philippines' major trading partners sales advanced to the US (23.1%), China (11.5%), Thailand (8.1%), Germany (5%), Japan (1.2%). In contrast, exports contracted to South Korea (-19.7%), Singapore (-14.7%), Taiwan (-13.4%), Netherlands (-8.1%), Hong Kong (-4.4%), the EU countries (-17.5%), and the ASEAN countries (-1.2%). 

Imports dropped by 5.4 percent to USD 9.43 billion in May 2019, following a 1.9 percent fall in the prior month. This was the second straight month of yearly decline in inbound shipments, as purchases shrank for iron and steel (-25.5%); transport equipment (-19.3%); mineral fuels, lubricants (-17.2%); plastics in primary and non-primary forms (-13.7%); industrial machinery and equipment (-4.8%); and other food and live animals (-3.7%). In contrast, imports grew for cereals and cereal preparations (72.1%); miscellaneous manufactured articles (8.1%); electronic products (2%), and telecommunication equipment and electrical machinery (0.2%).

Purchases decreased from Japan (-13.6%), South Korea (-24.7%), Taiwan (-24.1%), and Thailand (-8.1%). Conversely, purchases from China, the Philippines's largest supplier of imports, rose 6.4%. Also, imports increased from the US (0.8%), Singapore (22.8%), Indonesia (3.6%), Malaysia (55.7%), Vietnam (56.0%),  the ASEAN countries (16.1%), and the EU (10.5%)
 
Considering the first five months of the year, exports fell 1.3 percent from a year earlier while imports increased 1.0 percent, recording a USD 16.51 billion trade gap.
 



Friday July 05 2019
Philippines June Inflation Rate Slows to 22-Month Low of 2.7%
PSA l Rida Husna | rida@tradingeconomics.com

The Philippines' annual inflation rate fell to a 22-month low of 2.7 percent in June 2019 from 3.2 percent in the previous month and below market expectations of 2.9 percent. Food inflation dropped to its lowest since January 2017, and there was a slowdown in cost of both housing and transport.

The central bank set an inflation target range of between 2 to 4 percent from 2018 to 2020.

Year-on-year, prices of food and non-alcoholic beverages increased by 2.7 percent in June, slowing from a 3.4 percent rise in May. It was the lowest food inflation since January 2017, as cost fell for corn (-4 percent), rice (-1.7 percent), and bread (-0.6 percent), while prices rose further for other cereals, flours, cereal preparation, bread, pasta and other bakery products (3.6 percent); meat (3.3 percent); fish (3.8 percent); milk, cheese and egg (2.5 percent); oils and fats (2.9 percent); fruits (5 percent); vegetables (9.5 percent); sugar, jam, honey (2.2 percent), and food products, n.e.c (7.3 percent).

In addition, prices eased for housing, water, electricity, gas and other fuels (3 percent vs 3.3 percent in May); transport (1.6 percent vs 3.5 percent); furnishing, household equipment and routine maintenance (3.1 percent vs 3.2 percent); communication (0.3 percent vs 0.4 percent); and alcoholic beverages and tobacco (9.3 percent vs 9.5 percent). Also, cost of education fell further (-4.5 percent vs -3.8 percent). In contrast, inflation was steady for both clothing and footwear (at 2.4 percent), and restaurant and miscellaneous goods and services (at 3.3 percent). Additionally, prices advanced at a faster pace for both health (3.7 percent vs 3.6 percent) and recreation and culture (3.2 percent vs 3.1 percent).

On a monthly basis, consumer prices rose by 0.2 percent in June, slowing from a 0.3 percent gain in May. Prices went up for alcoholic beverages and tobacco (0.7 percent); clothing and footwear (0.2 percent); housing, water, electricity, gas and other fuels (0.4 percent); furnishing, household equipment and routine maintenance (0.2 percent); health (0.3 percent), recreation and culture (0.1 percent), education (1.2 percent), and restaurants & miscellaneous goods and services (0.3 percent). Meanwhile, cost of transport dropped (-1.5 percent) while food and non-alcoholic beverages prices were flat.


Thursday June 20 2019
Philippines Holds Key Interest Rate Steady at 4.5%
Bangko Sentral NG Pilipinas | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The central bank of the Philippines left its key overnight reverse repurchase facility rate unchanged at 4.5% on its June 20th 2019 meeting, while markets had expected it at 4.25%. Policymakers said the decision remains consistent with the manageable inflation outlook and firm domestic growth prospects, unveiling that a prudent pause allows it to observe and assess the impact of prior monetary adjustments. The bank noted the uptick in inflation to 3.2% in May from 3% in April, which is likely to be temporary and still within the 2-4% target range. Also, the BSP cut its inflation forecasts for 2019 to 2.7% from 2.9% and for 2020 to 3% from 3.1%, amid declining oil prices and the prospect of a stronger peso.

Statement by the Bangko Sentral NG Pilipinas:

At its meeting on monetary policy today, the Monetary Board decided to keep the interest rate on the BSP’s overnight reverse repurchase (RRP) facility unchanged at 4.50 percent. The interest rates on the overnight lending and deposit facilities were likewise held steady.

Latest baseline forecasts indicate that inflation remains likely to settle within the target range of 3.0 percent ± 1.0 percentage point for both 2019 and 2020, while inflation expectations have moderated further. The Monetary Board also noted that while real sector activity moderated in the first quarter of the year, overall domestic economic activity is likely to remain firm, supported by a projected recovery in household spending and the continued implementation of the government’s infrastructure spending program.

At the same time, the Monetary Board observed that the risks to the inflation outlook are broadly balanced for 2019 and 2020. Weaker global economic prospects amid a possible easing in global demand and increased trade tensions continue to temper the inflation outlook. The potential adverse effects of a prolonged El Niño episode remain a key upside risk to inflation.

On balance, therefore, the Monetary Board believes that the manageable inflation outlook and firm domestic growth prospects support keeping monetary policy settings steady for the time being. A prudent pause allows the BSP to observe and assess the impact of prior monetary adjustments including the phased reduction in the reserve requirements to be completed by the end of July. Going forward, the BSP will continue to monitor emerging price and output conditions to ensure that monetary policy remains in line with the BSP’s price stability objective while being supportive of economic growth.