Latest Views



We see GDP growth accelerating to 6% in Q3 and faster in Q4, as domestic demand revs up further. With inflation holding below the 2% BSP floor in H2, and huge employment gains (supported by 2nd lowest self-rated poverty rate of 42% in Q3 as estimated by SWS), consumer spending shall show even more robust growth. Significantly lower interest rates from last year and NG catching up on infrastructure spending in H2 should drive investment spending higher. The two together and a neutral external account support our view. However, financial markets seemed unfriendly in September, although we see a likely rebound in the bond market in Q4, while the stock market outlook remains iffy.



We are bullish on the economic growth and inflation fronts. We expect Philippine growth to expand by 6.0% in Q3 and accelerate further to 6.5% in Q4 on the back of formidable new job creation by July 2019, inflation falling to 1.7% in August on track to go sub-1.5% by September and signs of resurgence in National Government (NG) spending to boost domestic demand starting Q3. We remain optimistic about the bond markets, but neutral on the equity market.



Despite PH inflation continuing to tumble to a 31-month low of 2.4% in July, and exports growth slightly positive for entire Q1, GDP growth in Q2 remained feeble at 5.5% only a tad slower than Q1. This resulted from a sizeable fall in National Government (NG) spending (esp. on infrastructure) in June and April, and in capital goods spending as well as weak agriculture output gains. This put an added downward push to equity prices, but the opposite, positive effect on bonds. Trading in the latter reached a 55-month high of P767.7-B led a plunge in yields for all tenors, especially at the short end.














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November 15, 2019


Inflation has troughed. Interest rates are likely upward. Major assumption is no delay in government budget that’s viewed as protracted as last year.



November 11, 2019


Philippine third quarter (Q3) GDP growth of 6.2% beat consensus of 6%, and an acceleration from two straight quarters of sub-6% expansion. Growth was buoyed by acceleration in household consumption (+5.9% from +5.3% in Q3 2018), and construction (+17.3% from +13.3%), and lower trade deficit (-21% to $9.2bn in Q3 2019) on the demand side, and agriculture (+3.1% from flat growth) and services particularly trade (+8.1% from +5.1%), financial (+10% from +7.2%), and transport and storage (+9.1% from +5.4%) on the supply side.

PSEi has further to rise

PSEi has further to rise

November 5, 2019


The PSEi has further to rise. But watch out! It’s MSCI index rebalance season this month.



















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