ECONOMIC BRIEFING




By Iggy S. Aquino, CIS
REGIONAL PERSPECTIVE:
                                       Asia’s Economic Landscape
Economic Indicator                 ...
PHILIPPINES: 1st quarter of 2010:
      Best Quarterly Performance in 3 years




Source: National Statistical Coordinatio...
PHILIPPINES: 1st quarter of 2010: INDUSTRIAL ORIGIN
                   Where did the growth come from?

               SEC...
PHILIPPINES: PESO – DOLLAR
                 EXCHANGE RATE

   Peso to dollar at current P45-P46:$1 level
   Peso-Dollar ...
PHILIPPINES: INFLATION RATE


   Averaged 4.3% from January to April, 2010, higher
    than 3.2% average of 2009. May, 20...
PHILIPPINES: INFLATION RATE
                         Historical 1998 – 1st Quarter 2010, average

                        ...
PHILIPPINES: INTEREST RATES

   BSP reduced key interest rates in 2009 as part of
    stimulus economic program
     May...
PHILIPPINES: HISTORICAL INTEREST RATES
        T-Bill 91 day & Treasury Bond 10 years Yields (1988-2010)


40.0

35.0

30....
PHILIPPINES: ECONOMIC INDICATORS
                             Forecasted 2010 vs. Actual 2009


    ECONOMIC INDICATOR    ...
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Economic Briefing 1st Half 2010

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Excerpts from my Economic Analysis presentation in 2 strategic planning sessions conducted June 13 and June 28-29, 2010.

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Economic Briefing 1st Half 2010

  1. 1. ECONOMIC BRIEFING By Iggy S. Aquino, CIS
  2. 2. REGIONAL PERSPECTIVE: Asia’s Economic Landscape Economic Indicator 2009 2010 1Q 2010 Forecast GROSS DOMESTIC PRODUCT Developing Asia1 4.5% 6.6% n.a. Malaysia -2.7% 6.0% 10.0% Indonesia 4.5% 6.0% n.a. Thailand -2.9% 6.0% 12.0% Singapore -1.5% 7.0% 15.5% China 8.4% 9.0% 11.9% Philippines 0.9% 3.4% 7.3% 1/Source of the figures for Developing Asia: Asian Development Bank Special Note, December 2009 2/ Source of the rest of the data: Asian Economic Monitor by UBS, 5 January 2010 3/ Sourced from ABS-CBN News Website
  3. 3. PHILIPPINES: 1st quarter of 2010: Best Quarterly Performance in 3 years Source: National Statistical Coordination Board (NSCB)
  4. 4. PHILIPPINES: 1st quarter of 2010: INDUSTRIAL ORIGIN Where did the growth come from? SECTOR & SELECTED SUBSECTOR Q1 2009 Q1 2010 Agriculture, Forestry & Fishery 2.1% -2.5% Sugarcane -3.5% -4.6% Industry -26.0% 15.7% Petroleum Products -29.0% 65.9% Electrical Machinery -18.6% 54.9% Services 2.8% 6.1% Private Services 4.0% 9.5% Affected by El Nino phenomenon. The sector employs about 38% of total Philippine workforce. Increased manufacturing activities due to global recovery Boosted by broadcasting (31.4% growth) & BPO (11% growth) Source: National Statistical Coordination Board
  5. 5. PHILIPPINES: PESO – DOLLAR EXCHANGE RATE  Peso to dollar at current P45-P46:$1 level  Peso-Dollar level supported in recent years by burgeoning OFW remittances, the BPO industry & foreign equity investments.  International reserves at a all-time high of $47.7 billion as of May 31, 2010.  Peso could remain relatively stable vs. US dollar due to sustained fund inflows  Foreign investments could rise as incoming administration perceived to be investor friendly
  6. 6. PHILIPPINES: INFLATION RATE  Averaged 4.3% from January to April, 2010, higher than 3.2% average of 2009. May, 2010 inflation was stable at 4.2%.  Increasing consumption and an improving economy should push up 2010 inflation, although slightly.  Continuing economic growth in 2011 could be a primary factor for projected rise in inflation
  7. 7. PHILIPPINES: INFLATION RATE Historical 1998 – 1st Quarter 2010, average Inflation Rate Increase due to spike in fuel prices 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: National Statistical Coordination Board
  8. 8. PHILIPPINES: INTEREST RATES  BSP reduced key interest rates in 2009 as part of stimulus economic program  May not yet exit program due to Eurozone debt crisis.  91-day T-bills remain below 4% yield.  Concern is ballooning fiscal deficit  Budget deficit as of May, 2010 is already P131.6 billion  Incoming administration may finance deficit thru debt vs. additional taxes  Increased government borrowings could push up interest rates in 4Q 2010 and 2011.
  9. 9. PHILIPPINES: HISTORICAL INTEREST RATES T-Bill 91 day & Treasury Bond 10 years Yields (1988-2010) 40.0 35.0 30.0 T-Bill 91 day 25.0 T-Bond 10 year 20.0 15.0 10.0 5.0 0.0 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 Source: National Statistical Coordination Board, with base data from BSP.
  10. 10. PHILIPPINES: ECONOMIC INDICATORS Forecasted 2010 vs. Actual 2009 ECONOMIC INDICATOR 2009 2010 Forecast Gross Domestic Product 0.9%1 5.9%-6.9%1 Inflation 3.2%3 4.5% average 2 Fiscal Deficit P298.5 billion4 3.5% As percent of GDP2 OFW Remittances $17.34 billion2 6.0% Increase vs. prev yr2 Peso Dollar Exchange Rate P47.63/$US12 P43.505 1/ From Development and Budget Coordinating Committee, NEDA as of June 10, 2010 2/ From Bangko Sentral ng Pilipinas 3/ From National Statistics Office 4/ From Bureau of Treasury 5/ Morgan Stanley forecast as of May 3, 2010

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