ECCP at Work

BSP bullish on PHL’s ‘full recovery’

The central bank is confident that the Philippine economy is on track for a “full recovery,” although analysts warned of headwinds from the Russia-Ukraine war and a potential US economic slowdown. “The Philippines is on its way to full recovery. From a recession in 2020, it bounced back with a 5.7% [growth] last year and we’re looking at a growth rate of 7-9% this year,” Bangko Sentral ng Pilipinas (BSP)Governor Benjamin E. Diokno said in an interview with CNN in Washington. Government officials earlier said they expect the economy to return to its pre-pandemic level in the second half of 2022. The BSP has said this has been factored in for its decision to keep policy rates unchanged at record lows in March.

Bank chiefs offer optimistic outlook despite uncertainty

Philippine banks are optimistic about the outlook for business recovery this year despite uncertainty arising from the Russia-Ukraine war and the upcoming election. BDO Unibank, Inc. President and Chief Executive Officer Nestor V. Tan said the bank expects profit to grow by 5-10% this year, after the good start seen in the first three months. Mr. Tan said loans are projected to expand by 8-12% amid the relative stability of the markets, and normalization of asset quality and delinquencies.

Local stocks still face ‘downside risks’

Philippine stocks continue to face downside risks as inflationary pressures, amplified by the Russia-Ukraine invasion, weigh on investor sentiment. The benchmark Philippine Stock Exchange Index attempted to rally toward the 7,200 level early in the week before encountering resistance and closing back down below 7,000 on Friday.

DA pressed to lift ban on processed animal protein from Italy

Food security advocacy group Tugon Kabuhayan pressed the Department of Agriculture (DA) to lift the ban on Italian porcine processed animal protein (PAP) as the trade restriction could raise fish prices by P2 per kilogram. The group said the blanket import ban on Italian pork products should be modified to exempt PAP importers, as the raw material “does not pose threats to the local swine industry.”

Philippines wants climate change funds for developing countries

The Philippines is calling for accessible climate financing for developing countries that are vulnerable to global warming, saying more should be done to those who are least responsible for but are most exposed to the problem. Climate Change Commission Secretary Robert Borje said the challenge for and responsibility of Asia and Pacific nations is to craft and implement water development strategies and trajectories in the era of climate change “up to the last mile” and “up to the last person.” “To this end, we need climate financing. Make it more accessible and available. Unlock it for the developing world,” Borje said during the 4th Asia-Pacific Water Summit in Japan last Saturday.

Strong loan demand seen

Philippine banks are expecting increased loan demand from companies and households in the current quarter amid easing COVID restrictions and increasing economic activity, according to the results of a survey conducted by the Bangko Sentral ng Pilipinas (BSP). Based on the Senior Bank Loan Officers’ Survey (SLOS) for the first quarter, the BSP said there is a net rise in overall demand for credit from across all firm types, particularly for top corporations, large middle-market firms, small and medium enterprises (SMEs) and micro-enterprises using the diffusion index (DI) approach. The central bank said the survey indicated expectations of a net increase in overall demand for credit from firms, which were largely attributed to the improvement in customers’ economic outlook, as well as increased inventory and accounts receivable financing needs for borrowers.

Philippines on its way to full recovery – BSP

The Philippines is on its way to a full economic recovery from a recession caused by the pandemic despite the recent surge in cases in China as well as the impact of Russia’s invasion of Ukraine, according to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno. In an interview with CNN international business correspondent Richard Quest, Diokno said the Philippines is looking at a faster gross domestic product (GDP) growth of seven to nine percent this year after emerging from the pandemic-induced recession with a 5.7 percent expansion last year.

Investors sought high rates for 364-day T-bills

The Bureau of the Treasury sold P15 billion in Treasury bills (T-bills) on Monday as rates moved sideways, with investors demanding higher rates for longer-term tenor of the government security. The tenors attracted total bids amounting to P37.6 billion, making the auction more than twice oversubscribed.The 91-day T-bills capped at an average rate of 1.14 percent, dropping by 8.3 basis points from previous auction’s 1.223 percent. Total bids for the security reached P17.2 billion, more than triple the P5-billion program. Meanwhile, the 182-day T-bills slipped by a basis point to 1.558 percent from 1.568 percent in the last auction. Bids for the debt paper stood at P13.44 billion, more than double the P5-billion offering.

Oil prices up for 2nd week

Fuel prices are up for the second consecutive mainly attributed to the European Union’s announcement of an official ban on Russian oil imports that would further restrict supply worldwide. Sentiments were also dampened by the political crisis in Libya that could affect crude production. According to the Department of Energy (DOE), as of April 19, the latest average Manila price per liter of gasoline (RON95) was at P71.75, diesel at P72.15 and kerosene at P72.56.

PSE Index barometer courts 7,000

The benchmark Philippine Stock Exchange Index (PSEi) continued to trade within a tight range on Monday amid low volumes while regional markets were sluggish. By the closing bell, the PSEi rose 0.32 percent or 22.24 points to 7,020.83 while the broader all-shares index added 0.03 percent or 1.20 points to 3,722.80.The index saw a small rebound from losses over the last two sessions but large movements were limited by thin trading volume. PSE data showed 650.1 million shares valued at P4.52 billion changing hands on Monday.Markets overseas were also lower as investors remained wary of the prospect of aggressive monetary tightening by US Federal Reserve to combat higher consumer prices.

Stocks rise ahead of earnings reports

Share prices reversed early market losses to end higher Monday. The peso was down. The Philippine Stock Exchange index (PSEi) was up 22.24 points to 7,020.83, a 0.32 percent hike. The broader all shares index was up 1.2 points to 3,722.80, a 0.03 percent hike. Losers edged gainers 127 to 54 with 47 stocks unchanged. Trading turnover reached P4.52 billion. The peso closed at 52.41 to the dollar, down from 51.315 on Friday. The currency opened at 52.38, an intraday high, and hit a low of 52.48. Trading turnover reached $726 million.

Luis Limlingan, managing director at Regina Capital and Development Corp., said the market reversed losses from Friday “as investors continued to weigh the likelihood of a 50 basis points (bps) rate hike in May.Investors are also positioning ahead of a slew of corporate earnings here and in the US this week that could influence investment confidence.