2023 July

The Philippine central bank is ready to resume tightening monetary policy if needed, as inflation is still a challenge. Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco Dakila stated that policymakers are determined to bring inflation back to the central bank’s 2 percent-4 percent target this year.

President Ferdinand “Bongbong” Marcos Jr. has approved the enactment of the Maharlika Investment Fund, enabling the establishment of the Philippines’ first sovereign wealth fund, despite significant public discontent regarding the legislation. However, the fund may encounter funding challenges depending on the financial performance of the Bangko Sentral ng Pilipinas by the end of 2023, following the BSP’s net loss in the first quarter of P1.4 bn.

On the regulatory front, the Securities and Exchange Commission (SEC) has been criticized for its slow response to technological and financial advancements, prompting them to hasten the implementation of short-selling and establish more stringent rules for cryptocurrencies and digital asset exchanges. Despite worries about inflation, the Philippines witnessed a notable 27% YoY increase in vehicle sales in June, reaching a total of 36,311 units sold. However, month-to-month sales indicate signs of strain, declining by 8.23%, possibly reflecting the impact of inflation on consumer spending behavior.

The Department of Labor and Employment (DOLE) announced the approval of Wage Order No. NCR-24, granting a 7% increase in minimum wages. The new rates are from P570 to P610 for the non-agricultural sector and P533 to P573 for the agriculture sector, service, and retail establishments with 15 or fewer workers, as well as manufacturing establishments with fewer than 10 workers. The increase was in response to petitions from labor groups citing the rising prices of basic goods and commodities.

The Joint Foreign Chambers (JFC) in the Philippines are urging the government to reconsider its plan to impose new taxes on “junk food” and higher taxes on sweetened beverages, stating that it is not the right time.