Philippines Microeconomic Weekly Update #47

MACROECONOMICS WEEKLY UPDATE

President Ferdinand Marcos Jr. officially approved a legislation aimed at establishing a comprehensive employment strategy for the Philippines. Marcos stated that this law is designed to tackle issues such as poor job quality, skill mismatches, and underemployment while promoting the adoption of digital technologies. The President also expressed the government’s commitment to provide incentives to employers and private sector participants who contribute to enhancing skills and knowledge sharing among both businesses and workers. Additionally, this initiative will broaden access to financial services for micro, small, and medium-sized enterprises.

YIELDS on government securities (GS) increased last week after US and Philippine central banks doubled down on their hawkish stance.GS yields at the secondary market went up by an average of 5.78 basis points (bps) week on week, according to PHP Bloomberg Valuation Service Reference Rates as of Sept. 29 published on the Philippine Dealing System’s website.Yields climbed across the board week on week. Rates of the 91-, 182-, and 364-day Treasury bills (T-bills) rose by 9.47 bps, 3.84 bps, and 9.81 bps, respectively.At the belly, rates of the two-, three-, four-, five-, and seven-year Treasury bonds increased by 6.87 bps, 7.83 bps, 8.40 bps, 8.20 bps, and 5.55 bps, respectively.Yields at the long end went up as the 10-, 20-, and 25-year debt papers increased by 1.52 bps, 1.32 bps, and 0.80 bp, respectively.Yield movements last week came after the majority of US central bank officials hinted at prolonged periods of high interest rates, echoing the guidance from the latest US Federal Reserve meeting.The Fed last month kept its key rate between 5.25% and 5.5% and penciled in one more hike before the year ends.

THE PESO depreciated against the dollar on Monday due to expectation of faster September inflation.The local currency closed at P56.775 versus the dollar on Monday, weakening by 20 centavos from Friday’s P56.575 finish, data from the Bankers Association of the Philippines’ website showed.The local unit opened Monday’s session stronger at P56.70 per dollar. Its intraday best was at P56.67, while its weakest showing was at P56.80 against the greenback.Dollars traded went down to $1.15 billion on Monday from the $1.19 billion on Friday.The peso weakened amid market expectations of a potential uptick in domestic inflation for September, according to a trader.

 

INDUSTRY UPDATE

TELECOMMUNICATIONS

Fiber internet tycoon Dennis Anthony Uy’s Converge ICT Solutions Inc. surpassed two million nationwide home broadband subscribers as its entry into the prepaid and mass market segment pays off.In a stock exchange filing on Monday, Converge noted the “significant upswing” in its new products apart from “stable growth” in postpaid as of the first nine months of the year.

  “Converge is positioned to maintain this growth momentum as we bolster our penetration into the different segments of the market” -Dennis Uy,2023

GLOBE Telecom, Inc. is selling its stake in Electronic Commerce Payments, Inc. or ECPay to the parent firm of electronic wallet platform GCash for P2.31 billion.In a stock exchange disclosure on Monday, Globe said it had entered an agreement with Globe Fintech Innovations, Inc. (Mynt) for the sale of its 77% stake in ECPay.Payment One, Inc., which holds a 23% stake in ECPay, had also agreed to the transaction, allowing Mynt to fully acquire ECPay, according to the listed telecommunications company.

HOLDINGS

ALTERNERGY Holdings Corp. on Monday said it had tapped three investment banks to lead in raising the P12-billion project financing for its two wind power projects.In a stock exchange disclosure, the energy company said it had mandated BPI Capital Corp., RCBC Capital Corp., and SB Capital Investment Corp. — after a competitive process to assist in finalizing the terms and structure of the debt financing for the projects.

POWER AND UTILITIES 

 

The Department of Energy (DOE) is looking to redevelop nine ports scattered across the country to serve as integration ports that will house materials needed for offshore wind development as the government anticipates higher investor interest in the renewable energy.Energy Assistant Secretary Mylene Capongcol told reporters on Tuesday that the DOE was currently assessing the identified ports with multilateral lender Asian Development Bank (ADB).

BANKS

For the first time in seven years, the Asian Development Bank (ADB) has surpassed Japan as the Philippines’ top source of official development assistance (ODA), which posted a marginal growth in 2022 following a “significant reduction” in pandemic-related aid as the economy recovered.ODA from the Manila-based multilateral lender amounted to $10.85 billion in 2022, accounting for 33 percent of the total pile, data from the National Economic and Development Authority (Neda)

 

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