Tuesday February 12 2019
Philippines Trade Gap Smallest in 3 Months
PSA l Rida | rida@tradingeconomics.com

The Philippine's trade deficit narrowed to USD 3.75 billion in December of 2018 from USD 3.97 billion in the same month a year earlier. It marked the smallest trade gap since September, as exports dropped 12.3 percent year-on-year to USD 4.72 billion, while imports declined 9.4 percent to USD 8.47 billion.

Year-on-year, exports contracted 12.3 percent to USD 4.72 billion, far faster than a 0.3 percent fall in the previous month and marking the second straight month of fall. Sales of electronic products, the country's top exports, contracted 15.2 percent. Also, exports shrank for: machinery and transport equipment (-53.1 percent), coconut oil (-24.8 percent), and other manufactured goods (-9 percent). In contrast, sales rose for: bananas (296.1 percent); processed food and beverages (61.8 percent); miscellaneous manufactured articles (27.6 percent); ignition wiring set and other wiring set used in vehicles, aircrafts and ship (23.1 percent); metal components (14.5 percent); and chemicals (6.7 percent).

Outbound shipments fell to Japan (-1.2 percent), Hong Kong (-17 percent), China (-11 percent), Singapore (-19 percent), the ASEAN countries (-5 percent), and and the EU countries (-27.1 percent). Conversely, sales grew to the US (9.9 percent).

Imports fell 9.4 percent to USD 8.47 billion in December, swinging from a 6.8 percent rise in a month earlier. It was the first drop in inbound shipments since July 2017 and the steepest in more than six years, dragged down by transport equipment (-33.3 percent); miscellaneous manufactured articles (-18.4 percent); mineral fuels, lubricants and related materials (-14.4 percent); telecommunication equipment and electrical machinery (-5.5 percent); other food and live animals (-3.5 percent); and electronic products (-1.6 percent). In contrast, imports grew for: cereal and cereal preparations (57.8 percent); iron and steel (15.4 percent); plastics in primary and non-primary form (1.5 percent); and industrial machinery and equipment (0.6 percent).

Purchases shrank from Japan (-3.4 percent); South Korea (-17.7 percent); the US (-36.9 percent); Thailand (-4.6 percent); and the ASEAN countries (-7.9 percent). In contrast, imports from China, the Philippines's biggest supplier of purchases, grew by 8.1 percent. In addition, imports from the EU countries surged 20.1 percent. 

Considering 2018 full year, the trade deficit increased sharply to USD 41.44 billion from USD 27.38 billion in the same period a year earlier.




Thursday February 07 2019
Philippines Holds Key Interest Rate at 4.75%
Bangko Sentral NG Pilipinas | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Philippine central bank held the rate on its overnight reverse repurchase facility at 4.75 percent on February 7th, as widely expected, saying inflation expectations declined further while economic growth moderates. The central bank paused its tightening cycle in December following five straight rate hikes in previous meetings.

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 4.75 percent. The interest rates on the overnight lending and deposit facilities were likewise held steady.

The Monetary Board’s decision is based on its assessment of a more manageable inflation environment. Latest baseline inflation forecasts show inflation settling within the target band of  3.0 percent ± 1.0 percentage point for 2019-2020, as price pressures continue to recede due to the decline in international crude oil prices and the normalization of supply conditions for key food items. Inflation expectations have also declined further and are now aligned to the inflation target for 2019-2020. At the same time, domestic demand conditions have remained firm, supported by a projected recovery in household spending and the sustained implementation of the government’s infrastructure program.

Meanwhile, the risks to the inflation outlook are seen to remain evenly balanced for 2019 while leaning toward the downside for 2020 given a more uncertain global economic environment, which in turn could temper potential upward pressures from commodity prices in the coming months.

Given these considerations, the Monetary Board deems the prevailing monetary policy settings to be appropriate, as previous monetary responses continue to work their way through the economy. The Monetary Board also emphasized that the BSP remains vigilant against developments that could affect the outlook for inflation and is prepared to take appropriate policy action as necessary to safeguard its price and financial stability objectives.




Tuesday February 05 2019
Philippines Inflation Rate Slows to 10-Month Low of 4.4%
PSA l Rida Husna | rida@tradingeconomics.com

The Philippines' annual inflation rate eased to a 10-month low of 4.4 percent in January of 2019 from 5.1 percent in the previous month. The latest reading was slightly below market estimates of 4.5 percent, amid a marked slowdown in cost of food and transport.

Year-on-year, prices of food and non-alcoholic beverages increased by 5.6 percent in January 2019, noticeably slower than a 6.7 percent rise in December 2018 and marking the lowest food inflation since February. In addition, cost rose at a softer rate for: alcoholic beverages and tobacco (16.1 percent vs 21.7 percent in December); clothing and footwear (2.5 percent vs 2.8 percent); housing, water, electricity, gas and other fuels (4 percent vs 4.1 percent); health (4.3 percent vs 4.8 percent). Also, cost of transport went up 2.5 percent, much less than a 4 percent rise in a month earlier. In addition, cost of education continued to fall (-3.8 percent, the same as in December). On the other hand, inflation was steady for: communication (at 0.4 percent); recreation and culture (at 3.2 percent); and restaurants and miscellaneous goods and services (at 4.3 percent); while cost of furnishing, household equipment and routine maintenance rose slightly faster (3.9 percent vs 3.8 percent). 

On a monthly basis, consumer prices rose by 0.1 percent in January, after a 0.4 percent fall in December 2018. It marked the first monthly increase in three months, as cost went up for: alcoholic beverages and tobacco (0.2 percent); clothing and footwear (0.1 percent); housing, water, electricity, gas and other fuels (0.2 percent); furnishing, household equipment and routine maintenance (0.3 percent); health (0.2 percent); recreation and culture (0.2 percent); and restaurants and miscellaneous goods and services (0.3 percent), while was flat for: food and non-alcoholic beverages; and education. In contrast, cost of transport dropped 0.7 percent.

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




Thursday January 24 2019
Philippines Q4 GDP Annual Growth Below Forecast
Philippine National Statistical Coordination Board l Chusnul Ch Manan| chusnul@tradingeconomics.com

The Philippines economy advanced an annual 6.1 percent year-on-year in the December quarter of 2018, following a downwardly revised 6.0 percent expansion in the previous quarter and below market consensus of a 6.2 percent growth. Private consumption and net external contributed positively to the GDP growth while both government spending and investment slowed. Considering the whole 2018, the economy grew 6.2 percent, easing from a 6.7 percent expansion in 2017.

In the three months to December, household consumption expanded 5.4 percent year-on-year, compared to a 5.2 percent increase in the third quarter. Additionally, net external contributed positively to growth as exports rose more than imports. Exports increased by 13.2 percent, following a 13.3 percent rise in the third quarter, sales of goods went up 15.3 percent (from 15.9 percent in Q3) and those of services rose 4.5 percent (from 1.2 percent). Meantime, imports advanced at a softer 11.8 percent, following a 17.9 percent rise in the preceding quarter, driven by purchases of goods (12.4 percent from 19.7 percent) and services (10.0 percent from 8.3 percent).
 
Meanwhile, gross domestic capital formation rose by 5.5 percent, easing from an 18.2 percent growth in the previous quarter. A slowdown was recorded in investment in intellectual property products (32.2 percent from 24.0 percent), followed by construction (19.3 percent from 16.4 percent), breeding stocks & orchard development (5.2 percent from 6.2 percent), and durable equipment (3.1 percent from 18.0 percent). Also, government expenditure went up 11.9 percent, slower than a 14.3 percent growth in the September quarter.
 
On the production side, the industry sector expanded 6.9 percent, following a 6.1 percent gain in the preceding quarter. Output rose at a faster pace in construction (21.3 percent from 18.2 percent); electricity, gas & water supply (6.6 percent from 4.7 percent) and manufacturing (3.2 percent from 3.3 percent). On the other hand, mining & quarrying jumped by 10.8 percent, after a 0.2 percent drop in the prior quarter. Also, agriculture, hunting, forestry & fishing grew 1.6 percent, after showing no growth in the previous period.

The services sector advanced 6.3 percent, slowing a 6.8 percent growth in the previous period. Output growth eased in public administration & defense, compulsory social security (12.6 percent from 17.8 percent); financial intermediation (6.0 percent from 6.9 percent); transport, storage & communication (2.7 percent from 5.4 percent); and real estate (4.4 percent from 5.5 percent). Meantime, output went up further for trade & repair of motor vehicles, motorcycles, personal & household goods (5.9 percent from 5.2 percent); other services (9.2 percent from 7.9 percent), 

Considering the whole 2018, the economy expanded 6.2 percent, slowing from a 6.7 percent growth in 2017 and reaching the weakest pace in three years.
 
On a quarter-on-quarter seasonally adjusted basis, the GDP advanced 1.6 percent, following an upwardly revised 1.5 percent expansion in the September quarter. It was the strongest quarterly growth rate since the third quarter 2017.




Thursday January 24 2019
Philippines Quarterly GDP Growth in Over a Year
PSA l Rida Husna | rida@tradingeconomics.com

The Philippines GDP advanced 1.6 percent quarter-on-quarter in the three months to December of 2018, after an upwardly revised 1.5 percent growth in the previous quarter. It was the strongest quarterly growth rate since the third quarter 2017, mainly boosted by the industry sector and agriculture, hunting, forestry and fishing.

In the December quarter, the industry sector expanded 1.9 percent, compared to a 1.8 percent growth in the September quarter and output rebounded for agriculture, hunting, forestry and fishing (1.4 percent vs -0.7 percent). On the other hand, a slowdown was seen in the services sector (1.4 percent from 1.6 percent).

Year-on-year, the economy advanced by 6.1 percent, compared to a downwardly revised 6.0 percent expansion in the September quarter. 

Considering the whole 2018, the economy expanded 6.2 percent, slowing from a 6.7 percent growth in 2017. It marked the weakest pace of expansion in three years and was below the government's target for 2018 of between 6.5 to 6.9 percent. For 2019, the government targets the economy to advance between 7 to 8 percent. 




Thursday January 10 2019
Philippines Trade Deficit Widens in November
National Statistics Office of Philippines l Chusnul Ch Manan | chusnul@tradingeconomics.com

The Philippine's trade deficit widened to USD 3.90 billion in November of 2018 from USD 3.28 billion in the same month a year earlier. Imports went up 6.8 percent to USD 9.47 billion while exports fell 0.3 percent to USD 5.57 billion.

Year-on-year, imports increased 6.8 percent to USD 9.47 billion in November, lower than a 21.4 percent rise in October. Purchases grew for cereal and cereal preparations (113.5 percent); mineral fuels and lubricants (34.1 percent); iron & steel (24.9 percent); other food and live animals (19.9 percent); plastics in primary and non-primary form (12.5 percent); industrial machinery and equipment (10.5 percent); telecommunication equipment and electrical machinery (4.5 percent); miscellaneous manufactured articles (4.4 percent); electronic products (3.9 percent); and transport equipment (0.2 percent).
 
Inbound shipments from China, the Philippine’s biggest source of purchases, grew 4.3 percent. Also, imports went up from South Korea (13.5 percent), the US (7.2 percent); and Vietnam (34.2 percent). In contrast, purchases fell from Japan (-4.6 percent) and Thailand (-3.2 percent); and the ASEAN countries (-4.8 percent).
 
Meantime, exports dropped by 0.3 percent to USD 5.57 billion, following an upwardly revised 5.5 percent rise in the previous month. It was the first decline in exports since May, as sales of electronic products, the country's top exports, decreased by 1.6 percent. Also, sales went down for chemicals (-16.9 percent); ignition wiring set and other wiring sets used in vehicles, aircrafts and ships (-14.9 percent), and coconut oil (-1.3 percent). On the other hand, sales rose for bananas (100.4 percent); machinery and transport equipment (80.3 percent); miscellaneous manufactured articles (35.5 percent); other mineral products (14.2 percent); metal components (6.5 percent), and other manufactured goods (5.7 percent).
 
Outbound shipments advanced to South Korea (47.8 percent); the US (12.6 percent); China (1.8 percent) and Malaysia (7.8 percent). By contrast, outbound shipments declined to Japan (-1.3 percent); Hong Kong (-15.2 percent), and the ASEAN countries (-5.7 percent)
 
Considering the first eleven months 2018, the trade deficit widened sharply to USD 37.69 billion from USD 23.41 billion in the same period a year earlier.
 
 


Friday January 04 2019
Philippines Inflation Rate Slows to 7-Month Low of 5.1%
PSA l Rida Husna | rida@tradingeconomics.com

The Philippines' annual inflation rate fell to a 7-month low of 5.1 percent in December of 2018 from 6.0 percent in the previous month. The latest figure was well below market consensus of 5.6 percent, mainly driven by a marked slowdown in cost of food and transport.

Year-on-year, prices of food and non-alcoholic beverages increased by 6.7 percent, much slower than a 8 percent rise in November and marking the lowest food inflation since June. In addition, cost rose less for: alcoholic beverages and tobacco (21.7 percent vs 21.8 percent in November); housing, water, electricity, gas and other fuels (4.1 percent vs 4.2 percent); furnishing, household equipment and routine maintenance (3.8 percent vs 4.0 percent); transport (4.0 percent vs 8.9 percent); and restaurants and miscellaneous goods and services (4.3 percent vs 4.5 percent). At the same time, cost of education continued to fall (-3.8 percent, the same as in November). On the other hand, inflation was steady for: communication (at 0.4 percent); and recreation and culture (at 3.2 percent), while prices increased faster for: clothing and footwear (2.8 percent vs 2.7 percent); and health (4.8 percent vs 4.5 percent).

On a monthly basis, consumer prices dropped 0.4 percent, after a 0.2 percent fall in November. Cost decreased for food and non-alcoholic beverages (-0.4 percent); and housing and utilites (-0.1 percent). In contrast, prices went up for: clothing and footwear (0.2 percent); furnishing, household equipment and routine maintenance (0.2 percent); health (0.3 percent); recreation and culture (0.2 percent); education (0.1 percent); and restaurant and miscellaneous goods and services (0.1 percent). 

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


Tuesday December 11 2018
Philippines Trade Gap Hits Record High in October
PSA l Rida | rida@tradingeconomics.com

The Philippine's trade deficit widened sharply to USD 4.21 billion in October of 2018 from USD 2.59 billion in the same month a year earlier. It was the largest trade gap on record, as import rose much more than exports.

Year-on-year, imports jumped 21.4 percent to USD 10.32 billion in October, after a 26.1 percent rise in September. Purchases grew for all commodities: cereal and cereal preparations (52.3 percent); mineral fuels and lubricants (45.4 percent); other food and live animals (33.6 percent); telecommunication equipment and electrical machinery (26.7 percent); miscellaneous manufactured articles (25.4 percent); plastic in primary and non-primary form (24.9 percent);  industrial machinery and equipment (21.5 percent); transport equipment (18.4 percent); electronic products (14.8 percent); and iron and steel (7.8 percent).

Inbound shipments from China, the Philippine’s biggest source of purchases, soared 28.2 percent. Also, imports went up from South Korea (57.1 percent), the US (3.9 percent); the ASEAN countries (7.9 percent) and the EU countries (61.7 percent). In contrast, imports fell from Japan (-4 percent) and Thailand (-1.3 percent).

Meanwhile, exports rose 3.3 percent to USD 6.11 billion, following an upwardly revised 0.8 percent gain in the previous month. Sales went up for: machinery and transport equipment (94.1 percent); bananas (30.9 percent); other manufactured goods (24.3 percent); miscellaneous manufactured articles (23.8 percent) and metal components (17.6 percent). Also, sales of electronic products, the country’s top exports, increased by 0.6 percent. In contrast, exports fell for: electronics equipment and parts (-11.8 percent); chemicals (-5.8 percent); and ignition wiring set and other wiring sets used in vehicles, aircrafts and ships (-4.1 percent).

Outbound shipments advanced  to the US (18 percent); China (4.4 percent); Thailand (14.3 percent); and the ASEAN countries (9.2 percent). In contrast, outbound shipments declined to Hong Kong (-7.3 percent), Japan (-7.5 percent), and Singapore (-3.1 percent). 

Considering the first ten months 2018, the trade deficit increased sharply to USD 33.92 billion from USD 20.13 billion in the same period a year earlier.



Wednesday December 05 2018
Philippines Inflation Rate Slows to 4-Month Low of 6.0%
PSA l Rida | rida@tradingeconomics.com

The Philippines' annual inflation rate fell to a 4-month low of 6.0 percent in November of 2018 from a 9-1/2-year high of 6.7 percent in the previous two months. The latest figure was below market consensus of 6.2 percent, mainly driven by a marked slowdown in cost of food and housing.

Year-on-year, prices of food and non-alcoholic beverages increased by 8 percent, easing from a 9.4 percent rise in October and marking the lowest food inflation since July. In addition, cost slowed for housing, water, electricity, gas and other fuels (4.2 percent from 4.8 percent in October); and communication (0.4 percent vs 0.5 percent). Also, cost of education continued to fall (-3.8 percent, the same as in October). On the other hand, prices increased faster for alcoholic beverages and tobacco (21.8 percent vs 21.6 percent); clothing and footwear (2.7 percent vs 2.5 percent); furnishing, household equipment and routine maintenance (4 percent vs 3.7 percent); health (4.5 percent vs 4.3 percent); recreation and culture (3.2 percent vs 3.1 percent); and restaurants and miscellaneous goods and services (4.5 percent vs 4.2 percent). Additionally, inflation was steady for transport (at 8.9 percent, the same as in October).

On a monthly basis, consumer prices fell 0.2 percent, after a 0.3 percent rise in October and reaching the first monthly decline since May 2017. Cost decreased for food and non-alcoholic beverages (-0.7 percent from 0.1 percent) and housing and utilites (-0.1 percent from 0.4 percent). Also, cost of transport eased (0.6 percent from 0.9 percent). Meanwhile, prices advanced further for alcoholic beverages and tobacco (0.5 percent from 0.4 percent); clothing and footwear (0.3 percent from 0.1 percent); education (0.1 percent from a flat reading) and restaurants and miscellaneous goods and services (0.5 percent from 0.2 percent). Additionally, inflation was steady furnishing, household equipment and routine maintenance (at 0.3 percent, the same as in October); health (at 0.3 percent) and recreation and culture (at 0.1 percent).

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



Thursday November 15 2018
Philippines Lifts Key Rate by 25 Bps to 4.75%
Bangko Sentral NG Pilipinas | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The central bank of the Philippines raised its key overnight reverse repurchase rate by 25bps to 4.75 percent on November 15th, 2018, as widely expected. It is the fifth straight hike in borrowing costs this year, bringing interest rate to the highest since 2009. The decision was primarily driven by intensifying inflationary pressures, especially after higher wages and transport costs were approved recently. Also, the BSP increased its inflation forecasts for 2018 to 5.3% from 5.2% while cut its forecast for 2019 to 3.5% from 4.3%. For 2020, inflation is seen at 3.3%. The interest rates on the overnight lending and deposit facilities were likewise lifted accordingly.

In October 2018, the inflation stood at 6.7 percent, unchanged from the previous month but remaining at the highest level since February of 2009. The latest reading is also well above the upper bound of the Bank’s target range of 3.0 percent ± 1.0 percentage point in both 2019 and 2020.

Excerpts from the Statement by the Bangko Sentral NG Pilipina:

"While the latest inflation forecasts show inflation settling within the target band of 3.0 percent ± 1.0 percentage point in both 2019 and 2020, after considering the impact of non-monetary measures, including the rice tariffication bill and the suspension of the oil excise tax, the Monetary Board decided to raise the policy rate by 25 basis points given the upside risks to the inflation outlook and given that inflation expectations have remained elevated as supply-side and possible wage pressures continue to drive price developments.

At the same time, the Monetary Board believes that prospects for the domestic economy remain generally favorable and allow some scope for a measured adjustment in the policy rate to rein in inflation expectations and preempt further second-round effects. The Monetary Board deemed it necessary to respond with proactive policy action to help temper the risks to the inflation outlook, including those emanating from the continued uncertainty in the external environment amid tighter global financial conditions and trade tensions among major economies.

Nevertheless, the Monetary Board continues to emphasize the need for follow-through non-monetary measures to mitigate the impact of supply-side factors on inflation.

The BSP remains prepared to take appropriate policy actions as needed to ensure the achievement of its price and financial stability objectives."