MARKET HEADLINE: SHORT SELLING BY OCTOBER

The PSEi - PSE Composite Index & The Economy
7-10

...this should be exciting Tongue

PSE to introduce short selling in October


MANILA - The Philippine Stock Exchange (PSE) will allow short selling starting October this year, its president said Monday. 

In short selling, a trader borrows shares whose price he thinks will decline and then sells them in the open market. Once the shares' price falls, he buys them back at the lower price and returns them, making a profit via difference in the stock's old and new price. 

However, if the stock's price rises, the trader loses money as he has to buy them back at the higher price before returning them.

PSE president and CEO Ramon Monzon said the stock market will introduce short selling amid a clamor from foreign investors. But he added that the PSE is putting safeguards into short selling. 

"We're not going into this recklessly," Monzon said in an inteview with ANC's Market Edge. 

Short selling will be limited to the 30 component stocks of the PSE index. The practice will also be limited to 10 percent of the outstanding shares of a company. 

Besides short selling, the PSE is also looking into derivatives, Monzon said. 

The PSEi closed flat on Monday at 7,186.62. The market lost 20 percent of its value this year, entering bear territory.


source: http://news.abs-cbn.com/business/07/09/1...in-october
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7-13

...mahirap pag walang foreign buying

Hot money flows bare investor unease

MORE FOREIGN FUNDS fled the Philippines in June — marking the second straight month of net outflows — as concerns about rising inflation and a weaker peso dampened investor appetite, the Bangko Sentral ng Pilipinas (BSP) said yesterday.

Data released showed June’s gross inflows at a two-year low.

Registered foreign portfolio investments posted a $516.12-million net outflow last month, more than double the $206.35-million net outbound funds recorded in May and reversing the marginal $72.56-million net inflow in June 2017.

These investments are referred to as “hot money” due to the ease by which such funds enter and leave the country with ease in the face of market-moving news.

Foreigners put in $910.78 million worth of funds in June, the smallest amount of investments since January 2016.

These bets were cancelled out by $1.427-billion funds plucked out of the Philippines, with hot money seeing net outflows for all of June’s five weeks.

“This may be attributed to the United States (US) Federal Reserve’s decision to increase interest rates and investor concerns on inflation and the further weakening of the Philippine peso,” the BSP said in a statement.

The Fed introduced last month its second rate hike for the year in the face of US economic recovery evidenced by inflation and job creation targets met.

Last month also saw a second rate hike from the BSP, amounting to another 25 basis points, to rein in inflation pressures.

Inflation went beyond the central bank’s estimates to clock in at a five-year-high 5.2% last month, which brought the first semester pace to 4.3% against an official 2-4% full-year target for 2018.

The peso has been trading at 12-year lows against the dollar as it pierced the P53 level since mid-June. For the month, the currency averaged P53.0476 versus the greenback to remain one of Asia’s worst performers.

Nearly 92% of the investments went to shares of publicly listed companies, particularly holding companies, property firms, banks, food, beverage and tobacco companies, as well as utility providers. Transactions in such securities, however, yielded net outflows of $346 million.

The BSP said the “continuing trade war between the US and China” pushed investors to withdraw their funds, adding to a net foreign selling trend at the Philippine Stock Exchange since February.

Foreigners also placed their money in government-issued debt papers, which also ended up with $170-million net outflows.

Despite the June turnout, hot money still yielded a $306.25-million net inflow last semester.

This reverses the $467.83-million net outflows in 2017’s first half, data showed.

Investors from the United States, United Kingdom, Singapore, Hong Kong and Switzerland emerged as the biggest hot money sources last month.

About 82.7% of outbound funds went back to the US as the primary safe haven for market players.

The central bank expects hot money to register $900-million net outflows by year’s end, which would be wider than the $205.03 billion in outbound funds last year, amid nagging uncertainties in global financial markets.


source: http://bworldonline.com/hot-money-flows-...or-unease/
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7-27

2019 budget assumptions in focus


PRESIDENT Rodrigo R. Duterte submitted the proposed 2019 national budget to Congress after his State of the Nation Address (SONA) on Monday, setting into motion legislative hearings which, economists said, will do well to pay close attention to changing economic conditions.

Presidential Spokesperson Harry L. Roque, Jr. said in a press briefing on Tuesday that the Executive branch submitted the P3.757-trillion proposed 2019 budget, which was approved by the Cabinet on July 9, after the SONA and amid the tumultuous change in leadership at the House of Representatives that saw former president Pampanga Rep. Gloria M. Arroyo (second district), an economist, replacing Rep. Pantaleon D. Alvarez of Davao Del Norte’s first district as speaker.

“… [P]agkatapos po ng makulay na pangyayari sa Kamara, naisumite rin po ang 2019 budget kahapon (Regarding the 2019 budget, after the colorful events at the House, we were able to submit the 2019 budget yesterday). We commend the Department of Budget and Management for the early submission of the 2019 national budget… after the State of the Nation Address,” Mr. Roque said.

The proposed 2019 “cash-based” budget is slightly less than the P3.767-trillion obligation-based budget this year since the former provides for disbursements only within the fiscal year. Obligation-based budgets, in contrast, allow state offices to disburse funds for over two years.

According to the President’s budget message, “projects that will advance infrastructure development (under the Build Build Build Program) and human capital development (focused on education and health) are particularly highlighted and supported.”

Cash-based appropriations, the message added, will “promote better-designed, better-coordinated projects and programs from our agencies and speed up the delivery of goods and services to our people, obligations, or contracts for programs, activities and projects for implementation during the fiscal year…”

“Under the current obligation-based budget, agency performance is based on contracts awarded for the year, even if these contracts deliver their goods and services in the following years. Due to the pile-up of undelivered contracts, it is not unheard of that payments to performing contractors be inordinately delayed and that unscrupulous contractors are given advanced payments,” the budget message read.

“It is imperative that we modernize our budgeting system to meet international standards and adopt good practices.”

The disbursement program proposed for 2019 totals P3.832 trillion, 13.7% more than this year’s P3.37 trillion. Target revenues total P3.208 trillion, 12.7% more than the P2.846 trillion this year, leaving a fiscal deficit of P624.4 billion that is 19.23% bigger than the P523.68-billion deficit ceiling for this year.

Ahead of the start of public hearings on the proposed budget by the House committee on appropriations on July 31, economists interviewed yesterday cited the need to keep tabs on changing economic conditions, including on quickening inflation and the depreciating peso.

“Currently, the proposed budget is at its highest not only because of the anticipated inflationary trend that the economy is bound to face next year but also because of… the much-anticipated governments’ Build! Build! Build! infrastructure program,” Emmanuel J. Lopez, economist and the Dean of Colegio de San Juan de Letran’s Graduate School, said in an e-mail.

Mr. Duterte in his budget message said that Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion law, accounted for just 0.4 of a percentage point of the 4.3% first-half inflation pace and that external economic developments were at play in driving overall increases in prices of widely used goods.

He also assured that the 2019 budget provides for social mitigating measures against inflation, such as the increase of the monthly unconditional cash transfer to P300 from P200 currently, and of the Pantawid Pasada Program conditional cash transfer budget to P3.9 billion from P1 billion.

It also cited key programs to protect marginalized sectors such as the National Health Insurance program, free tertiary education, free education, basic education facilities program, as well as rice subsidy for military and other uniformed personnel.

“Basing from the past two fiscal years of the Duterte administration budget expenditures, appropriations seem to be in place and expended wisely,” said Mr. Lopez.

Emmanuel A. Leyco, a professor at the Asian Institute of Management, said in a mobile phone message that: “Cash-based budgeting is a good approach that will require strict discipline among agency administrators.”

“The major challenge for them are the assumptions they made in the budget preparation. If these assumptions do not materialize, they should be prepared to make prompt adjustments along the way,” he added.

The Development Budget Coordination Committee assumed a 4-4.5% inflation this year and 2-4% for 2019; as well as a P50- to P53-per-dollar exchange rate, among other assumptions for computing appropriations.

Mitzie Irene P. Conchada, vice-dean at the De La Salle University School of Economics, said separately: “It would be interesting to note how the administration will utilize the budget for its major projects such as the Build, Build, Build project on infrastructure.”

“One thing to be cautious about is its impact on the depreciation of the peso since infrastructure projects requires materials that are mostly imported,” she explained.

The budget message counted the Metro Manila Subway project and the Pasig River Ferry Convergence program among key infrastructure investments in 2019 for Metro Manila; the Philippine National Railways (PNR) Manila-Laguna South Commuter rail, Malolos-Tutuban PNR North 1 rail, and the Chico River Pump Irrigation for other areas in Luzon; the Panglao International Airport, New Cebu International Container Port for the Visayas; as well as the Mindanao Railway project and the Davao International Airport for Mindanao, among others.


source: http://www.bworldonline.com/2019-budget-...-in-focus/
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8-1

...angat na naman inflation Sad

BSP sees July inflation still past 5%

PRICES of widely used goods likely sustained their overall increase past an official full-year target in July, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday.

The BSP Department of Economic Research said headline inflation likely picked up within a range of 5.1-5.8% last month, coming from a nine-year peak of 5.2% actually clocked in June.

The range compares to the 4.3-5.1% estimate given for last month, surpassing the central bank’s 2-4% target for the fourth straight month.

Inflation clocked in at 2.4% in July 2017. As of end-June, prices have increased by an average of 4.3%, versus the BSP’s 4.5% projection for the entire 2018.

The BSP unit attributed the elevated inflation expectation to a sustained increase in prices across most commodities.

“The increases in electricity rates in Meralco-serviced areas, water rate adjustments in Maynilad- and Manila Water-serviced areas, domestic gasoline and LPG prices, jeepney fares, scheduled increase of the tobacco excise tax, and prices of rice and other agricultural commodities could lead to upward price pressures during the month,” the central bank said in a statement published yesterday.

Manila Electric Co., the country’s biggest power distributor, said bills rose by P0.316 per kilowatt-hour in July due to a higher generation charge, reversing from two straight months of a rate reduction.

The Metropolitan Waterworks and Sewerage System also approved an increase in rates for water concessionaires at P0.99 per cubic meter (/cu.m.) for Manila Water Co., Inc. and P0.06/cu.m. for Maynilad Water Services, Inc., reflecting foreign currency movements.

July also saw fuel pump prices go up overall to mirror movements in world crude oil prices as well as the peso’s continuing general weakness against the dollar. Still, a rollback in domestic diesel prices may have partly offset upward pressures, the BSP said.

The government also approved last month a P1 provisional increase in jeepney fares to help drivers cope with rising fuel costs.

Another P2.50 increase in excise tax per pack of cigarettes also took effect last month, as provided under the Tax Reform for Acceleration and Inclusion law. Together with alcoholic drinks, these so-called “sin” products have seen the biggest year-on-year increase in prices.

At the same time, monsoon rains and three tropical cyclones that hit parts of the country in July wreaked damage to agriculture worth P2.579 billion, according to the National Disaster Risk Reduction and Management Council.

The Philippine Statistics Authority will report July inflation data on Tuesday next week.

If the BSP forecast were realized, it would mean a fresh high for monthly inflation, in line with expectations that price spikes will peak this quarter.

“Going forward, the BSP will continue to keep a watchful eye on the risks to the inflation outlook and will take necessary action to help ensure that inflation expectations remain firmly anchored to the target,” the BSP said.

BSP Governor Nestor A. Espenilla, Jr. has assured that the central bank has kept a firm hand on prices, and is considering “strong follow-through” to two 25-basis-point rate hikes announced in May and June that were designed to help rein in inflation pressures.

Yesterday, Mr. Espenilla assured lawmakers at the House of Representatives that the BSP “stands ready to take decisive monetary policy responses” to keep prices stable.


source: http://www.bworldonline.com/bsp-sees-jul...ll-past-5/
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8-1

Moody’s sees Philippines sustaining growth

Global debt watcher Moody’s Investors Service said Wednesday it expects the Philippines to sustain its growth momentum, as the government’s focus on infrastructure development reinforces the decade-long trend of increasing potential expansion.

“Strong GDP growth could accelerate even further, especially if the government achieves higher spending on infrastructure. Moody’s also expects further progress on improving government revenue on the back of additional reforms and ongoing enhancements in tax administration, which would also help keep government debt stable,” Moody’s said.

Moody’s conclusions are contained in the newly released credit analysis titled “Government of the Philippines―Baa2 Stable”. 

The report examined the sovereign in four categories, such as economic strength, which Moody ’s assessed as “high”; institutional strength “moderate (+)”; fiscal strength “moderate”; and susceptibility to event risk “low (+)”.

The report was an annual update to investors and not a rating action. Moody’s said the stable outlook on the Philippines’ sovereign rating indicated that upside and downside risks were balanced.

“The credit profile of the government of the Philippines [Baa2 stable] is supported by a large and fast-growing economy and continued gains in debt affordability, in part because of revenue reforms,” it said.

“These positive features are balanced against low per capita incomes and low revenue-raising capacity when compared with other Baa-rated countries,” it said.

Finance Secretary Carlos Dominguez III said Tuesday the government was eyeing to raise P3.2 trillion in revenues in 2019, including about P181.4 billion from tax reform implementation. The first package of the Comprehensive Tax Reform Program or the Tax Reform for Acceleration and Inclusion took effect in January, which reduced the personal income taxes but raised the taxes on alcohol, tobacco, and automobiles.

The second package that aims to corporate income taxes and rationalizes fiscal incentives were already submitted to Congress.  The Finance Department expects lawmakers to support it to meet the timetable set by President Rodrigo Duterte.
Moody’s said strong domestic demand and the economy’s limited reliance on foreign sources of financing shielded the Philippines from the direct impact of abrupt changes in the global macroeconomic and financial environment.

The government expects the gross domestic product to grow between 7 percent and 8 percent this year, on the back of higher fiscal spending, robust domestic demand, and investments.  GDP grew 6.8 percent in the first quarter, faster than the 6.5-percent expansion a year ago.

Moody’s said, however, that policymakers could face challenges in managing current inflationary pressures. Moody’s expects the rise in prices since the beginning of 2018 to be temporary and not as a result of excessive overheating risks.

The BSP so far increased interest rates twice this year―in May and June―by 25 basis points each to 3.5 percent in a move to rein in inflation, which averaged 4.3 percent in the first half, beyond the 2018 target range of 2 percent to 4 percent.


source: http://manilastandard.net/business/econo...rowth.html
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8-6

...increase the rate already para macontrol na inflation

Economists expect fresh rate hike

THE BANGKO SENTRAL ng Pilipinas (BSP) will most likely raise benchmark interest rates anew this week as inflation can be expected to have spiked further in July, analysts said in a BusinessWorld poll, with some noting there is room for a 50-basis-point (bp) hike to ease price pressures.

A poll of 14 economists last week yielded a median estimate of 5.5%, which if realized will inch up from June’s actual 5.2% and soar from July 2017’s 2.4%.

The estimate also falls in the middle of the 5.1-5.8% range given by the BSP Department of Economic Research last week.

“The main product groups that likely posted sharp price increases are fish, rice, corn, fruits, vegetables, tobacco, transport, electricity, gas and fuel,” said Security Bank Corp. economist Angelo B. Taningco, who gave a 5.7% estimate.

Typhoons and monsoon rains that hit the country last month contributed to price pressures, as did the P1 provisional increase in jeepney fares that took effect in early July, the analysts said.

The Philippine Statistics Authority will report official inflation data on Tuesday. As of end-June, prices have increased by an average of 4.3%, well beyond the BSP’s 2-4% goal for 2018.

Preliminary data from the Finance department showed that July inflation could settle at 5.3%, still higher than June’s tally which was a nine-year high.

Economists saw a broad-based increase in commodity prices, led largely by movements in food and fuel costs. The peso, which traded weaker than P53 versus the dollar last month, may have also jacked up the cost of imported goods.

“It is likely that the peak of inflation is still ahead of us,” said Jose Mario I. Cuyegkeng, senior economist at ING Bank N.V. Manila, adding: “We expect government efforts to make a more significant impact on alleviating supply and distribution weaknesses.”

Analysts said that inflation could top out in August and slowly slide back to the target range by 2019.

Emmanuel J. Lopez, economics professor and dean of the Colegio de San Juan de Letran Graduate School, also noted that price increases could “gradually taper off” this month amid a slowdown in business activity because of the Chinese “ghost month” superstition.

The BSP has said that inflation will likely peak this quarter and eventually ease, bringing the full-year average to 4.5%.

RATE HIKE
The economists agree that the BSP will raise policy rates this week, but differ on magnitude.

Six analysts said a 50 bp hike would be announced by the Monetary Board on Thursday, while the rest see a 25 bp increase on the table.

“In our meeting with the BSP Governor last week, he stressed the ‘strong response’ of the BSP to the persistently elevating inflation level. An equivalent of strong response would be, to me, a 50 basis points hike,” said Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines.

BSP Governor Nestor A. Espenilla, Jr. has hinted of a “strong follow-through” policy action after rate hikes of 25bp each in May and June, in a bid to rein in inflation pressures.

Others have interpreted the change in wording as an allusion to the magnitude of the rate hike, compared to a “measured” response previously committed by the central bank chief.

Market observers have flagged the need for a more “aggressive” response from the central bank in the face of unrelenting inflation.

Alice Fulwood, associate economist at UBS, noted that upcoming trade data and second-quarter gross domestic product growth figures also due this week could also affect the BSP’s decision if these turn out to be a “big surprise.”

Still, others see the BSP raising rates by 25 bp.

“[L]ikely, the BSP will hike rates this August by at least 25 bps to especially address second-round effects even as inflation remains hostage to potential rice and oil supply shocks for now,” said Ildemarc C. Bautista, vice-president and head of research at the Metropolitan Bank & Trust Co.

Benchmark rates are currently at 3-4%. The BSP last raised rates by 50bp in one go in July 2008, which saw inflation surge to a 17-year high at 12.2% against a 3-5% target that year.


source: http://www.bworldonline.com/economists-e...rate-hike/
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8-3

...nice forecast for our GDP Smile

‘Philippines likely grew by 6.8% in Q2’

MANILA, Philippines — Nomura Securities Ltd. said the Philippine economy likely grew by 6.8 percent in the second quarter, bolstering the possibility of a more aggressive policy rate hike by the Bangko Sentral ng Pilipinas (BSP).

Euben Paracuelles, economist at Nomura, said the expected 6.8 percent growth in the second quarter and the projected 5.6 percent inflation in July would call for a 50-basis-point rate hike during the meeting of the central bank’s Monetary Board on Aug. 9.

The economy accelerated by 6.8 percent in the first quarter from the revised 6.5 percent in the fourth quarter of last year.

Economic managers, through the Development Budget Coordination Committee, penned a GDP growth of between seven and eight percent for this year and next year.

“We forecast the second quarter GDP growth at a robust 6.8 percent year-on-year, stable from the first quarter, driven by the goods-producing sectors such as manufacturing and construction,” Paracuelles said.


The strong growth, he explained, reflects the surge in industrial production growth to 24.4 percent year-on-year in the second quarter from 18.6 percent in the first quarter.

Paracuelles also cited the 60.8 percent jump in public sector capital outlays and infrastructure disbursements from 34 percent, boosting construction activity.

The BSP’s Monetary Board delivered back-to-back rate hikes in May and June to curb rising inflationary pressures. It lifted benchmark rates by 25 basis points for the first time in more than three years on May 10 followed by another 25 basis points last June 20.

“Rising inflation and inflation expectations, which we have argued are the main policy parameters that will prompt BSP action, are underpinning the signals for a stronger policy adjustment in the near term,” Paracuelles said.

The economist added the BSP’s latest inflation report showed that inflation expectations have clearly risen.

“Despite our forecast of a larger 50 basis point hike in the policy rate, we expect the policy statement to keep a hawkish tone, with BSP likely to emphasize its vigilance against upside risks around its inflation forecasts, and underscore its readiness to act should it see more evidence of a further build-up of inflation expectations,” he said.


source: https://www.philstar.com/business/2018/0...grew-68-q2
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8-7

...talaga lang ha? COL na naman forcaster tsk tsk

PSE index seen to close at 8,600 level by end-2018

LOCAL equities have been affected by the movement of funds away from emerging markets.

COL Financial Group, Inc. expects the Philippine Stock Exchange index (PSEi) to close at the 8,600 level by the end of the year, revising downward its earlier projection following higher than expected inflation figures and the continued outflow of foreign funds from the local market.

The local brokerage firm identified a number of risks that the bourse encountered during the first half of the year, including faster inflation, delays in the implementation of rate hikes by the Bangko Sentral ng Pilipinas (BSP), and the movement of funds away from emerging markets.

This prompted COL Financial to lower its end-2018 projections by 7.5%, from the 9,300 level it predicted last February.

“The problem was the market in January was at 9,000 and everybody was so optimistic. So there was no room for any error… but we had more negatives coming in, so emerging markets became out of favor,” COL Financial Chief Equity Strategist April Lynn C. Lee-Tan said in a media briefing in Ortigas Center on Monday.

The market has also seen net foreign outflows for 25 straight weeks prior to a reversal the week before, as the US dollar strengthened due to rate hikes implemented by the US Federal Reserve.

The new 8,600 projection will translate to a price/earnings ratio of 19.8x.

Amid this downward revision, COL Financial expects the market to go no lower than its 6,986 close on June 25.

“We believe that 6,900 was in fact the low of this correction. We’re confident that this is already the bottom… 6,900 is already an adequate magnitude of the correction,” Ms. Tan said.

Ms. Tan also noted the Philippines’ economic growth remains to be favorable, which could lend support to the main index’s rise.

COL Financial is banking on various catalysts for the market’s recovery, including higher than estimated earnings growth for local firms; inflation to peak; the US Fed to stop raising rates; and firms in the US and China to continue reporting strong corporate earnings despite the trade war.

“The market wants to see the BSP raising rates… The market already anticipates that inflation will be high. It wants the BSP to taking steps to control inflation… In terms of what investors would like to see, they want them to raise rates,” Ms. Tan said.

Ms. Tan added that they expect two more rate hikes at 25 basis points each, or one rate hike at 50 basis points, for the rest of the year.

The company is keeping a bullish outlook on the property, telco, and gaming sectors for the rest of the year. Its stock picks include Ayala Land, Inc., Megaworld Property Corp., Bloomberry Resorts Corp., D&L Industries, Inc., Metropolitan Bank & Trust Company, and Security Bank Corp.


source: http://www.bworldonline.com/pse-index-se...-end-2018/
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8-7

...hindi pa pala tapos ang inflation rate increase?

July rate of 5.7% not the end of inflation woes

THE worst is still to come for millions of Filipino consumers as inflation is expected to further increase in the coming months, according to local economists.

This, after the Philippine Statistics Authority (PSA) reported on Tuesday that inflation increased to 5.7 percent in July 2018, nearing the high end of the Central Bank’s projected range of 5.1 percent to 5.8 percent.

Some economists believe inflation could reach even higher than 6 percent in days to come, which could force the Bangko Sentral ng Pilipinas to raise interest rates anew.

The BSP’s Monetary Board has set its next meeting on Thursday (August 9), at which the matter of key rates will be tackled.

“More or less in line [with] our expectations of 5.8. It will probably still be high for August—around the same level or even higher if supply of basic commodities remain tight and utility rates go up,” Ateneo Center for Economic Research and Development (ACERD) Director Alvin P. Ang said.

“[A 6-percent inflation rate is] possible but if government actions are coordinated and well executed, particularly in securing more supply of basic commodities, it will taper sooner. This is behavioral so you need to assure people. [The] Monetary Board will raise interest rates more if it is beyond 6 [percent],” he added.

Ang also said that, while inflation is expected to again track the government’s forecast of 2 percent to 4 percent next year, inflation will not fall below 3.5 percent.

This may be due to expectations that inflation is expected to only taper off by mid-2019, according to Emilio S. Neri Jr., lead economist of the Bank of the Philippine Islands (BPI).

Oil prices
Neri said the high inflation rate was largely due to oil prices. He said even if global oil prices will stay at around $70 per barrel, inflation will breach 6 percent this year.

Inflation, Neri said, will peak at 5.9 percent to 6.3 percent this year on account of higher oil prices.

“Unfortunately we still see inflation rising further in August and September. We are likely to see a turn by October and a return to target only by around mid-2019. This is what happens when average annual global oil prices surge by more 30 percent, something hardly any analyst saw coming,” he said.

Action for Economic Reform (AER) Coordinator Filomeno Sta. Ana III said oil prices are volatile and this makes it difficult to make forecasts.

Sta. Ana also said inflation is most sensitive to food prices, particularly rice prices since it has the most weight when it comes to the Consumer Price Index (CPI) at over 30 percent.

Apart from oil and food prices, University of Asia and the Pacific School of Economics Dean Cid Terosa also said inflation has not yet peaked on account of the typhoons that could enter the country’s area of responsibility in August and September.

Terosa also said the weak peso and the continuation of “trade and political altercations between the USA and other economies” will also adversely affect commodity prices.

“The pick-up in consumer demand toward the ‘ber’ months can conspire to push prices upwards in the coming months. I don’t expect the inflation rate to exceed 6 percent, though,” Terosa said.

He added that to address inflation, Terosa urged the government to raise interest rates.

Unionbank Chief Economist Ruben Carlo Asuncion said if the Central Bank hikes interest rates by as much as 50 basis points, this could help stem inflation.

Terosa added that there is also a need to reduce taxes on some food imports and monitoring the wholesale and retail distribution channels.

“The increase in rice prices is a self-inflicted wound; if we want to bring down rice price soonest, give priority to immediate importation by lifting quantitative restriction. And revamp an incompetent National Food Authority; fire its head. That alone will bring down inflation by half a percentage point or even more,” Sta. Ana added.

Reduced income
Independent research group IBON foundation said on Tuesday the rising inflation rate has already greatly reduced the income of 60 million poor Filipinos nationwide.

Based from its estimates using data from the Department of Finance (DOF), IBON said the country’s poorest lost about 12 percent of their monthly income because of the cumulative inflation rate in the first half of 2018 alone.

It said this was particularly detrimental to the welfare of the said individuals since they have the lowest monthly earnings in the country.

“Households in the poorest first decile with P7,724 monthly income have cumulatively lost P993 due to inflation, those in the second decile [P10,711 monthly income] have lost P1,377 and those in the third decile [P12,835 monthly income] have lost P1,650,” IBON said.

Meanwhile, it added households in the fourth decile (P15,132 monthly income) have lost P1,945, those in the fourth decile (P17,309 monthly income) lost P2,225, and those in the sixth decile (P21,119) lost P2,715.

IBON blamed the peso’s depreciation, rising global oil prices and the newly implemented Tax Reform for Acceleration and Inclusion (TRAIN) law for the spike in inflation this year.

Insufficient wage 
Labor groups expressed concern over this trend since their current minimum wages can barely keep up with the surge in the cost of living.

As of April 2018,  Associated Labor Union-Trade Union Congress of the Philippines (TUCP) Spokesman Alan Tanjusay said the nominal value of the average daily minimum wage of workers nationwide rose to P330.47 after nine regional wage boards adjusted their wage rates.

However, Tanjusay said, its real value or the buying power of the minimum wage with the effect of inflation is only P208.38 per day.

He said this is significantly lower than the P1,400 prescribed amount of the National Economic and Development Authority  for a family of five to live comfortably.

Price control 
With no apparent government intervention to raise the income of workers, Federation of Free Workers  Vice President Julius Cainglet appealed to authorities to at least regulate the prices of basic goods and services.

“As much as we want to, it’s going to be difficult to control prices but now is the time for the Department of Trade and Industry to closely monitor traders against profiteering,” Cainglet said in a statement.


source: https://businessmirror.com.ph/july-rate-...tion-woes/
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8-9

...ginawang 6.6% from 6.8% dating nireport buset

PSA revises Q1 economic growth rate downwards

THE ECONOMY grew slower than previously estimated in the first quarter, the government reported ahead of the release of second-quarter gross domestic product (GDP) data today.

The Philippine Statistics Authority (PSA) said its latest estimate shows that first-quarter GDP — which measures the value of final goods and services produced in a country — went up by 6.6%, lower than the 6.8% that was reported last May.

Four subsectors that recorded notable downward adjustments were: “other services” (revised to 6.9% from 8.8%), construction (8.8% from 9.3%), manufacturing (7.6% from 8%), and agriculture and forestry (1.9% from 2.4%).

A BusinessWorld poll of 15 economists and analysts yielded a median estimate of 6.8% for the April-June period. If realized, this figure would take first-semester average growth to 6.8%, a few points shy of reaching the 7-8% government target for full-year 2018. Some economic managers last month aired hopes for second-quarter GDP growth of seven percent. 


source: http://www.bworldonline.com/psa-revises-...downwards/
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