Philippines Microeconomic Weekly Update #46

MACROECONOMICS WEEKLY UPDATE

S&P Global Ratings lowered its 2023 GDP growth projection for the Philippines to 5.2 percent, citing global economic slowdown, delayed rate hikes by the BSP, and the impact of El Niño, but it remains the second fastest-growing economy in the region after India.

 

The national government’s budget deficit in August expanded to PHP133 billion, with lower revenues and higher spending, driven by a 6.6 percent drop in government receipts and a 10 percent increase in expenditures, while total August revenues decreased by 6.6 percent to PHP310.6 billion, though total revenue collections for January to August rose by 9.03 percent to PHP2.58 trillion; BIR’s August collections declined 6.7 percent to PHP213.5 billion, and BOC’s 8-month collection grew by 4 percent to PHP581.5 billion from last year.

 

The Philippines is set to launch Retail Dollar Bonds 2 (RTB) on September 26, with a two-week offering period, following the success of its last US-denominated RTB in 2021, aiming to raise funds and diversify financing sources, with plans to also introduce Sukuk bonds worth around $1 billion in the fourth quarter of this year, marking the government’s debut in the Islamic bond market.

 

The Bangko Sentral ng Pilipinas (BSP) is monitoring resistance levels to prevent the peso from crossing 57 per dollar due to market narratives and potential herding behavior, with the possibility of more aggressive intervention, although BSP’s governor is not concerned about a return to the 59 per dollar level seen last year.

Philippine central bank Governor Eli M. Remolona is open to an unscheduled interest-rate hike before November, maintaining a hawkish stance and ruling out any easing in the first half of 2024, emphasizing his commitment to returning inflation to the 2%-4% target by 2024, even if it affects economic growth.

 

INDUSTRY UPDATE

TELECOMMUNICATIONS

DITO CME Holdings Corp. announced that its subsidiary, DITO Telecommunity Corp., has obtained a $3.9 billion 15-year long-term loan facility, which will be used to support network expansion and enhance digital services. This loan represents one of the company’s largest long-term debts, arranged and syndicated by multinational banks.

EASTERN COMMUNICATIONS has partnered with a Singapore-based data center company Digital Edge to provide connectivity solutions to the latter’s data centers.

“Our recent partnership with Digital Edge is aligned with our strategic plan to expand hyperscale data center services to Philippine businesses. 
This collaboration allows us to provide robust connectivity solutions at NARRA1 and gradually improve our overall data center capabilities to meet
 both local and global market demands” -Eastern Communications,2023

POWER AND UTILITIES

MAYNILAD Water Services, Inc. is tapping a foreign expert to explore advanced filtration solutions to treat deteriorated water quality, particularly in Laguna Lake.

"“We have started in choosing and making a distinct trial for this advanced membrane technologies, so we’re doing a pilot now,” 
-  Ramoncito S. Fernandez, president and chief executive officer of Maynilad

In line with the Manila Electric Company’s (MERALCO) clean energy endeavors, the company expressed its interest in investing in electric vehicle (EV) assembly or manufacturing, in partnership with other EV companies.MERALCO, however, will not venture into nickel mining. In a report by BusinessMirror, company CEO Manuel V. Pangilinan said they would like to keep MERALCO as a power company. Nevertheless, they are looking at the development of the nickel industry since the future of EVs is bright.

TOURISM 

The Philippines is exploring new markets to encourage more divers to visit the country and boost the dive industry’s contributions to the economy.In remarks at the opening of the first Philippine Tourism Dive Dialogue in Cebu on September 14 and 15, Tourism Secretary Christina Garcia Frasco said ;

“The focus of the Department of Tourism [DOT] is to target various markets, whether that be families, solo travelers, luxe travelers, barkadas [groups of friends], and the like.
 And we have very specific programs that are targeted to various dive niche markets."

BANKS

Lucio Tan appointed PNB chairman emeritus Tycoon Lucio Tan stepped down as a director of the Philippine National Bank (PNB) after serving the role for over 20 years as one of the country’s biggest private universal banks moves ahead with its succession planning.But the billionaire will still be involved in the listed company as its chair emeritus. His wife, Carmen Tan, also left her post as director as she transitioned to board advisory duty.

HOLDINGS

LISTED CONGLOMERATE San Miguel Corp. (SMC) said that the businesses of its power unit, San Miguel Global Power Holdings Corp. (SMGP), and its subsidiaries are still “viable” and are able to meet financial obligations.

"SMGP remained profitable in 2022, as it has been since it started operations in 2011, in spite of the rise of coal and other fuel prices to unprecedented levels,” - SMC,2023

The company said the unit’s consolidated revenues of P221.4 billion and earnings before interests, taxes, depreciation, and amortization (EBITDA) of P42.32 billion are “both at par with results in prior years.”

Related Posts