Latest Views

April 2021


The economy has posted good numbers in March in terms of more jobs, a surge in National Gov ernment (NG) spending, expanding Manufactur ing sector, and capital goods imports getting back into positive territory. However, a renewed tight ening of quarantine (ECQ and MECQ) in Metro Manila+ due to the spike of COVID-19 cases and deaths to new records, has provided a headwind to a faster recovery. Bond markets will continue to recover from the huge jump in PH 10-year bond yields as the earlier views of even higher inflation has waned and U.S. Treasuries also on a downswing. The stock market will remain volatile due to the ECQ-MECQ and delays in vacci nations, even though some issues will become attractive.

March 2021


New positive economic data have emerged, such as an improved jobs situation, slight YoY gain in BIR tax take in December, and Manufacturing PMI still in expansion mode. These provide reasons for greater optimism on the recovery. Headwinds still do exist, with inflation running faster, lower exports and OFW remittances at onset of 2021. But we think the nascent rebound would gain traction if the government works closely with the private sector for faster vaccine rollouts, ease on restrictions on medication (emergency situation), and simplify and unify LGU restrictions that have constrained people and goods movements.

February 2021


Accelerating inflation, driven by the usual suspects (food and crude oil prices, the latter racing to a 13-month high by late February) and U.S. 10-year T-bond yields surging to around 1.5%, have dampened the beginning year optimism to a more somber mood in February. A resurgent Manufacturing sector provides a glimmer of hope for faster economic recovery, but the overhaul of fractured supply chains could take a little more time, aggravated in the past by the multiplicity of health certifications by city/municipality. Full-year GDP recovery may come only by end-2022. To be sure, financial markets have seen restiveness in February. Local 10-year T-bond yields climbed closer to 4.0% towards end-February, while PSEi has eased to sub-7,000 and may remain range bound until the economy and firms report significant month-on-month output gains.

January 2021


The Philippine economy appears on the mend, even though its pace may not satisfy workers and small businesses who are still out in a limb. However, positive economic data—elevated government spending, increase in exports and in Overseas Filipino Workers’ (OFW) remittances support the hope for economy to normalize, albeit in a new way starting 2021. The country’s Gross International Reserves (GIR) has reached a record-high level of $109.8-B by the end of 2020, equivalent to 11.7 months of imports, the latter only lower than Taiwan, India, China and Thailand. The positives have kept investors active in the country’s equities and bond markets and its ROPs performing better than equivalent U.S. Treasuries.










View all The Market Call issues







Market Outlook

Will Gov’t Sustain Fastest 2020 Pandemic Spending in Decades?

October 9, 2020


Despite the lockdown that hobbled infrastructure spending, down by 9.4% eight months into the year, government (gov’t) total spending for the period jumped 21% versus last year, same period. While there’s been a deceleration of gov’t spending in the last three months until last August, the pace of growth has never been this fast since 1995. It was only in 2018 when growth matched the current 21% upturn.

Weak Consumer Amid Higher Rates

Weak Consumer Sector Face Interest Rate Challenge

September 18, 2020


Unfortunately, interest rate upticks come at this time of still weak Philippine consumer sector based on several indicators: mobility index, consumer sentiment (reflected in a lowest reading since 2009 based on Social Weather Station survey), widespread joblessness and the still raging virus infection (increase in new daily Covid-19 cases to 3,903 in the past seven days compared to 2,593 in the first week of September).

NG Financing

Peso Yield Curve Inches Up

September 7, 2020


The country’s fiscal program has evolved faster than expected. The National Government (gov’t) budget deficit was revised higher to Php1.8T as the GDP growth forecast deteriorated to -6% based on last July’s revision by economic planners from -2% last March. The deficit came from a lower full year forecast of Php678bn this year.







View all Research Reports