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The Market Call - January 2012
2/7/2012
The Philippine economy expanded by a tepid 3.7% in both Q4 and the full year of 2011. Export demand was
weak, and government was under-spending its budget. The Services sector supported by real estate, financial
intermediaries, and business process outsourcing (BPO) gains continued to provide the impetus for growth in
the economy.
Download: THE MARKET CALL (JANUARY 2012).pdf
The Market Call - December 2011
1/10/2012
The Middle East and North Africa (MENA) crisis, the festering debt problems in the Euro-zone, and the global economic slowdown shattered high expectations for 2011, as Gross Domestic Product (GDP) growth sputtered to a mediocre 3-4% range, while Gross National Income (GNI) was likely to be only slightly above 2%.
However, surprisingly good numbers emerged in Q4, and the outlook for 2012 has brightened, even though the global economic weakness poses a threat to this.
Download: THE MARKET CALL (DECEMBER 2011).pdf
The Market Call - November 2011
12/12/2011
The Q3 Gross Domestic Product (GDP) growth of 3.2%, or flat from a revised 3.1% (from 3.4%), in Q2 caught analysts flatfooted with consensus estimate at 4.2%. It is easy to blame the Euro-zone crisis and the weak US recovery since exports fell by 27% during the quarter. But if we look at the production side, we would see that agriculture did not do well and industry slumped by 0.2%, led by a 12.2% decline in construction and hardly any growth in mining. But the main concern should be on the bigger income measure, Gross National Income (GNI) which inched up by only 1.6% despite an 8.6% gain in Overseas Filipino Workers’ (OFW) USD remittances. The culprit here was the 5.7% peso appreciation for the period.
Download: THE MARKET CALL (NOVEMBER).pdf
The Market Call - October 2011
11/16/2011
The year-on-year decline in August exports from -1.7% to -15.1% poses a threat to growth in the second half of 2011. However, positive news both from abroad and the domestic front lead us to believe that Gross Domestic Product (GDP) in H2 2011 will recover from a tepid GDP expansion of 4% in H1.
Download: THE MARKET CALL (OCTOBER 2011).pdf
The Market Call - September 2011
10/11/2011
Prior to the meltdown of financial markets in mid-September, the economy looked poised to recover in H2 following an unexciting 4.0% GDP expansion in H1. The domestic forces that provided the optimism were robust industrial growth, continuing job creation, improved fiscal situation, and easing of inflationary pressures.
Download: THE MARKET CALL (SEPTEMBER 2011).pdf
The Market Call - August 2011
9/9/2011
With the recovery in the US sputtering, the euro-zone mired in a debt crisis, and Japan slowly emerging from the devastating tsunami in March, the Philippines felt the compounded blow just as our other Asian neighbors also suffered a similar plight. Gross Domestic Product (GDP) growth in Q2 eased further to 3.4% from a revised (downward) 4.6% uptick in Q1. However, there was also a large base effect since the GDP gain for Q2 2010 was a 34-year record high of 8.9%, a result of massive election-related government spending.
Download: THE MARKET CALL (AUGUST 2011).pdf
The Market Call - July 2011
8/3/2011
After a tepid 4.9% expansion in Gross Domestic Product (GDP) in Q1 2011, another unexciting Q2 performance is emerging as economic indicators are showing a mixed picture.
On the negative side, Industrial production slowed further in May and may only manage a 2.0% uptick in Q2. This was caused by a slump in exports which became negative at
-3.2% in May as EU plunged by 42%.
Remittances from Overseas Filipino Workers (OFWs) picked up the pace from Q1 as April and May growth were above 6%. The National Government’s (NG) deficit was down by 94% for the first five months of 2011 to a minimal P9.4 B, compared to year ago levels. NG operational and capital spending showed a 33% increase in Q2 compared to the monthly average in Q1. Inflation remained subdued as it inched up to 4.6% in June, only 0.1% points higher than May.
Download: THE MARKET CALL (JULY 2011).pdf
The Market Call - June 2011
7/7/2011
Despite the disappointing 4.9% growth in Gross Domestic Product (GDP) in the first quarter of the year and policy rates rise to 4.5% or 0.5% since the beginning of the year, fresh economic data validated by the credit rating upgrade by Fitch are showing signs that the economy is likely to have bottomed in Q1.
Download: THE MARKET CALL (JUNE 2011).pdf
The Market Call - May 2011
6/7/2011
Higher crude oil prices, brought about by the Middle East and North African (MENA) political turmoil, and a festering debt crisis in the euro-zone, have finally dented Philippine economic growth. The resulting higher inflation rate and lower export growth in first quarter of 2011 have translated into a 4.9% Gross Domestic Product (GDP) growth for the period compared to a 6.1% expansion in the previous quarter. In addition, the Bangko Sentral ng Pilipinas (BSP) raised further its policy rates in May to 4.5% or 0.25% from the previous quarter, which may further dampen growth.
Download: THE MARKET CALL (MAY 2011).pdf
The Market Call - April 2011
5/11/2011
With the Middle East and North African (MENA) crisis continuing to unfold, crude oil prices and other commodity prices have hit the roof and worldwide sentiment turned negative towards emerging markets. However, in the home front, better-than-expected headline inflation rate in March, manufacturing output growth remaining double digit, and the fiscal deficit for Q1 80% lower than the same period last year, the domestic economy is showing signs of resiliency and unperturbed vitality. Optimism has been renewed and this has spilled over into the financial markets.
Download: THE MARKET CALL (APRIL 2011).pdf
The Market Call - March 2011
4/20/2011
Weaker Meralco electricity sales and job generation are pointing towards a slowdown in Q1 GDP growth compared to the robust performance of the previous quarters. Higher headline inflation rate also may eat up a part of consumer spending strength.
However, January’s industrial production jumped by 25.8%; while exports managed to keep its double-digit growth pace at 11.8%. The fiscal picture seems to be in order and remittances remain buoyant. All told, we think Q1 GDP growth is likely to ease, but probably, not by much.
Download: THE MARKET CALL (MARCH 2011).pdf
The Market Call - February 2011
3/10/2011
A gloomier outlook, albeit milder than that experienced abroad, has begun to settle in the economy as the spectre of inflation loomed larger in the face of the widening Middle East and North Africa (MENA) crisis. The spread of the crisis to Libya, where no clear victory of either side is in sight, and possibly to other oil-producing countries in the MENA has pushed crude oil prices near US$100/barrel.
Coupled with significantly higher wheat, corn, and soybean prices in the international markets, the MENA crisis has raised inflationary expectations, which are likely to play out more in Q2 2011. Consumer spending is likely to be a bit weaker compared to the previous quarter, while the corporate sector appears to remain strong with robust profits, double-digit exports growth and sustained residential construction providing the support.
Download: THE MARKET CALL (FEBRUARY 2011).pdf