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February 2019

 

The Philippine economy expanded by 6.2% in 2018, marking the 7th consecutive year of above-6% growth, albeit slower than the 6.7% pace in 2017. Higher inflation due to a sharp rise in crude oil prices in the first 10 months of the year and delayed imports of rice put brakes on consumer spending. The best news is that inflation is rapidly falling, to 4.4% in January, as oil prices remained some 30% below its 2018 peak. Other positive reports include OFW remittances still on the rise, and the peso stabilizing. Investors in the capital market had plenty of cheers with the onset of 2019, as bond yields fell while the PSEi rose by 7.3% in January, 3rd fastest in East Asia + Asean regions.

January 2019

 

Sharply falling inflation rate to 5.1% in December (and expected to hit BSP targets by Q1-2019), and a vigorous 43.6% gain in Infrastructure and Capital Outlays spending in November set the tone for other positive economic news released in early January. Exports stayed flat while OFW remittances continued to pile up in November. Even more encouraging data emerged in December for those economic indicators. While investors remained cautious in December, optimism reigned supreme at the onset of 2019 in both the bond and stock markets, despite a lower-than-expected GDP growth of 6.2% for 2018.

December 2018

 

The Philippine economy continued to emit positive signals for Q4 and beyond. Underemployment rate plummeted to a record low of 13.3% by October, while National Government’s (NG) infrastructure & capital outlays and capital goods imports retained their elevated growth paths. In addition, headline inflation dropped to 6% in November from 6.7% a month ago, signaling deceleration to fall within Bangko Sentral ng Pilipinas’ (BSP) inflation target by H2-2019. Despite a minor slowdown in exports, the peso appreciated significantly in November as the US dollar faltered and inflation appeared contained. Both the bond and stock markets recovered during the month, as emerging market assets looked attractive.

 

 

 

 

 

 

 

 

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Global Growth Jitters

Global Growth Jitters

March 8, 2019

 

The PSEi may trade sideways this week amid mounting worries over global growth slowdown and dearth of domestic catalysts.  So far, corporate earnings have failed to excite the market as results were mixed.  Out of the 26 companies that have released their earnings, nine outperformed consensus, eight were in line and 10 were behind. 

Easing Cycle in the Horizon

Easing Cycle in the Horizon

March 8, 2019

 

Former Budget secretary-turned Bangko Sentral (BSP) governor Benjamin Diokno signaled that monetary policy should be in sync with the Duterte administration’s expansionary fiscal policy -- aside from economic data considerations -- and that there is room for easing given that: 1) local inflation is trending down and heading back towards the government’s target band of 2%-4%; 2) Fed’s dovish signals; and 3) weaker global growth outlook.

Cement Sector

Cement Sector: Turning the Corner

March 8, 2019

 

Eagle and Cemex are at an inflection point and may have seen the worst in 2018. Both have announced sales volume growth last year, a sign demand is picking up after a huge market share loss in 2017 due to cheaper imports that gained market share of 15% since 2015 or 4.5mn of last year’s total supply of 30mn tons.

 

 

 

 

 

 

 

 

 

 

 

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