RECENT NEWS
Philippines: Q3 GDP
PHL economy grows 5.9% in third quarter, beats forecast
Philippines’ GDP growth rate for the third quarter surprisingly picks up to 5.9%, significantly faster than the disappointing 4.3% growth posted in the previous quarter. The top contributors to this expansion are the growth in the following sectors: wholesale and retail trade, repair of motor vehicles and motorcycles, financial and insurance activities, and construction. Given the faster growth rate, the government is optimistic that it will reach the GDP growth target of 6%-7% for this year.
Source: BusinessWorld Online. (2023, November 9). PHL economy grows 5.9% in third quarter, beats forecast
PHL economy grows 5.9% in third quarter, beats forecast
Philippines’ GDP growth rate for the third quarter surprisingly picks up to 5.9%, significantly faster than the disappointing 4.3% growth posted in the previous quarter. The top contributors to this expansion are the growth in the following sectors: wholesale and retail trade, repair of motor vehicles and motorcycles, financial and insurance activities, and construction. Given the faster growth rate, the government is optimistic that it will reach the GDP growth target of 6%-7% for this year.
Source: BusinessWorld Online. (2023, November 9). PHL economy grows 5.9% in third quarter, beats forecast
Philippines: October Inflation
Inflation slows to 4.9% in October
October inflation significantly cools down to 4.9% and is well below the 5.1%-5.9% forecast set by the BSP. The slowdown is mainly attributed to the easing of food prices such as vegetables and rice and the decrease in oil prices in October. However, upside risks, such as weather disturbances and geopolitical uncertainties, as well as the high demand during the Christmas season may still cause upward pressures on prices. The BSP forecasts a 5.8% inflation for 2023 but is likely to revise its forecasts in the November 16 meeting.
Source: BusinessWorld Online. (2023, November 8). Inflation slows to 4.9% in October
Inflation slows to 4.9% in October
October inflation significantly cools down to 4.9% and is well below the 5.1%-5.9% forecast set by the BSP. The slowdown is mainly attributed to the easing of food prices such as vegetables and rice and the decrease in oil prices in October. However, upside risks, such as weather disturbances and geopolitical uncertainties, as well as the high demand during the Christmas season may still cause upward pressures on prices. The BSP forecasts a 5.8% inflation for 2023 but is likely to revise its forecasts in the November 16 meeting.
Source: BusinessWorld Online. (2023, November 8). Inflation slows to 4.9% in October
Philippines: Maharlika Investment Fund
DBP seeks return of P25-B contribution to Maharlika fund
The DBP has filed for a formal request to get back its P25bn contribution to the MIF until its suspension is lifted. The DBP President cites uncertainties for the length of its suspension as the primary reason for filing a return and noted that they are willing to give back their contribution once the suspension is lifted. Moving forward, they also expressed that they would prefer to remit its contributions on a staggered rather than a lump-sum basis.
Source: BusinessWorld Online. (2023, November 8). DBP seeks return of P25-B contribution to Maharlika fund
DBP seeks return of P25-B contribution to Maharlika fund
The DBP has filed for a formal request to get back its P25bn contribution to the MIF until its suspension is lifted. The DBP President cites uncertainties for the length of its suspension as the primary reason for filing a return and noted that they are willing to give back their contribution once the suspension is lifted. Moving forward, they also expressed that they would prefer to remit its contributions on a staggered rather than a lump-sum basis.
Source: BusinessWorld Online. (2023, November 8). DBP seeks return of P25-B contribution to Maharlika fund
Philippines: Policy Rate Decision
Interest rates already at ‘highest level’ — Diokno
BSP is likely to pause rates in their next monetary board meeting on November 16. There is less pressure for the BSP to hike rates given the significant cool down in inflation and stronger GDP growth posted for the third quarter. Moreover, the Fed has also kept interest rates steady. Given the possible upside risks that are still present, the BSP is still leaning towards a longer pause.
Source: BusinessWorld Online. (2023, November 7). Interest rates already at ‘highest level’ — Diokno
Interest rates already at ‘highest level’ — Diokno
BSP is likely to pause rates in their next monetary board meeting on November 16. There is less pressure for the BSP to hike rates given the significant cool down in inflation and stronger GDP growth posted for the third quarter. Moreover, the Fed has also kept interest rates steady. Given the possible upside risks that are still present, the BSP is still leaning towards a longer pause.
Source: BusinessWorld Online. (2023, November 7). Interest rates already at ‘highest level’ — Diokno
Philippines: PSE Short Selling Debut
Short selling debuts in PHL after a 27-year wait
PSE is finally debuting short-selling after a long wait by investors. This should incentivize investors to hedge in the market instead of selling all stocks once economic uncertainties arise. PSE President Ramon S. Monzon is optimistic that this is a right step ahead to revive interest in the Philippine market again.
Source: BusinessWorld Online. (2023, November 6). Short selling debuts in PHL after a 27-year wait
Short selling debuts in PHL after a 27-year wait
PSE is finally debuting short-selling after a long wait by investors. This should incentivize investors to hedge in the market instead of selling all stocks once economic uncertainties arise. PSE President Ramon S. Monzon is optimistic that this is a right step ahead to revive interest in the Philippine market again.
Source: BusinessWorld Online. (2023, November 6). Short selling debuts in PHL after a 27-year wait
Philippines: Minilateralism for Middle Power Rise
Minilateralism Can Optimize the Philippines’ Middle Power Rise
To optimize its middle power status, the Philippines is turning to minilateralism, forming flexible partnerships with ASEAN and non-ASEAN states to address specific issues in the South China Sea. Minilateralism involves collaborating with the smallest number of countries needed to have a significant impact on a particular problem. Challenges include maintaining ASEAN Centrality, leveraging alliances like the US while keeping options open, asserting leadership in its geopolitical region, and building credible defense capabilities. A capability-based approach, focusing on effective task completion, will enhance the Philippines' role in minilateral activities, allowing it to navigate regional dynamics as a middle power.
Source: Geopolitical Monitor. (2023, October 19). Minilateralism Can Optimize the Philippines’ Middle Power Rise
Minilateralism Can Optimize the Philippines’ Middle Power Rise
To optimize its middle power status, the Philippines is turning to minilateralism, forming flexible partnerships with ASEAN and non-ASEAN states to address specific issues in the South China Sea. Minilateralism involves collaborating with the smallest number of countries needed to have a significant impact on a particular problem. Challenges include maintaining ASEAN Centrality, leveraging alliances like the US while keeping options open, asserting leadership in its geopolitical region, and building credible defense capabilities. A capability-based approach, focusing on effective task completion, will enhance the Philippines' role in minilateral activities, allowing it to navigate regional dynamics as a middle power.
Source: Geopolitical Monitor. (2023, October 19). Minilateralism Can Optimize the Philippines’ Middle Power Rise
Global Inflation
Central bankers split on whether war-related energy price jump would fuel rates
Will oil and gas prices rise because of the Israel-Palestine conflict? That’s the major question that central bankers around the world are trying to figure out. Most bankers aren’t keen to add to the already high rates as they argue that such supply shocks are likely transitory and where demand for energy has already waned. Meanwhile, some bankers argue that this may lead to a “cost-past through” that we have seen since the Ukraine-Russia war. So far, markets do not expect the conflict in the Middle East to affect global interest rates.
Source: Financial Times. (2023, November 8). Central bankers split on whether war-related energy price jump would fuel rates
Central bankers split on whether war-related energy price jump would fuel rates
Will oil and gas prices rise because of the Israel-Palestine conflict? That’s the major question that central bankers around the world are trying to figure out. Most bankers aren’t keen to add to the already high rates as they argue that such supply shocks are likely transitory and where demand for energy has already waned. Meanwhile, some bankers argue that this may lead to a “cost-past through” that we have seen since the Ukraine-Russia war. So far, markets do not expect the conflict in the Middle East to affect global interest rates.
Source: Financial Times. (2023, November 8). Central bankers split on whether war-related energy price jump would fuel rates
Bank of Japan
Bank of Japan governor warns unwinding ultra-loose policy is ‘serious challenge’
The Bank of Japan will proceed carefully with its policy rate increases to protect its bonds and financial institutions, but will not unwind its ultra-loose monetary policy. While inflation is likely to be tamed, high interest rates will likely hit an already weak consumption and investment demand.
Source: Financial Times. (2023, November 8). Bank of Japan governor warns unwinding ultra-loose policy is ‘serious challenge’
Bank of Japan governor warns unwinding ultra-loose policy is ‘serious challenge’
The Bank of Japan will proceed carefully with its policy rate increases to protect its bonds and financial institutions, but will not unwind its ultra-loose monetary policy. While inflation is likely to be tamed, high interest rates will likely hit an already weak consumption and investment demand.
Source: Financial Times. (2023, November 8). Bank of Japan governor warns unwinding ultra-loose policy is ‘serious challenge’
Chinese Economy
China’s Consumer Deflation Returns as Recovery Remains Fragile
While the rest of the world struggles with inflation, China’s deflation pressures persist in October as producer costs continue to decline and consumer prices stagnate. The government and the central bank are employing expansionary fiscal (e.g. infrastructure spending) and monetary policies (e.g. cut interest rates) to stimulate business confidence and household spending.
Source: Bloomberg. (2023, November 8). China’s Consumer Deflation Returns as Recovery Remains Fragile
China’s Consumer Deflation Returns as Recovery Remains Fragile
While the rest of the world struggles with inflation, China’s deflation pressures persist in October as producer costs continue to decline and consumer prices stagnate. The government and the central bank are employing expansionary fiscal (e.g. infrastructure spending) and monetary policies (e.g. cut interest rates) to stimulate business confidence and household spending.
Source: Bloomberg. (2023, November 8). China’s Consumer Deflation Returns as Recovery Remains Fragile
U.S.: Stock Market
Stocks Up, Bonds Down After Jobless Claims Data: Markets Wrap
Stock futures rose while bonds fell after the US unemployment rate rose this week. This also comes after traders bet that interest rates are likely to be cut mid-next year. Bitcoin also rose to its highest level since May 2022, almost exactly a year after FTX filed for bankruptcy.
Source: Bloomberg. (2023, November 9). Stocks Up, Bonds Down After Jobless Claims Data: Markets Wrap
Stocks Up, Bonds Down After Jobless Claims Data: Markets Wrap
Stock futures rose while bonds fell after the US unemployment rate rose this week. This also comes after traders bet that interest rates are likely to be cut mid-next year. Bitcoin also rose to its highest level since May 2022, almost exactly a year after FTX filed for bankruptcy.
Source: Bloomberg. (2023, November 9). Stocks Up, Bonds Down After Jobless Claims Data: Markets Wrap
South Korea: Stock Market
South Korea bans short selling until 2024
The Kospi stock index rose by as much as 4% after South Korean regulators banned short selling until the 2024 elections. This aims to protect retail investors from “naked” short selling by global institutional investors.
Source: Financial Times. (2023, November 6). South Korea bans short selling until 2024South Korea bans short selling until 2024
Contributors:
Natasha Amber Cabiltes
Edgar Desher Empeño
Jose Lorenzo Mercado
Brendan Emmanuel Miranda
Jacobe Joaquin Sevilla
South Korea bans short selling until 2024
The Kospi stock index rose by as much as 4% after South Korean regulators banned short selling until the 2024 elections. This aims to protect retail investors from “naked” short selling by global institutional investors.
Source: Financial Times. (2023, November 6). South Korea bans short selling until 2024South Korea bans short selling until 2024
Contributors:
Natasha Amber Cabiltes
Edgar Desher Empeño
Jose Lorenzo Mercado
Brendan Emmanuel Miranda
Jacobe Joaquin Sevilla