MACROECONOMICS WEEKLY UPDATE

According to Finance Secretary Diokno, the BSP may consider raising the benchmark policy rate by a smaller 25 bps or even pause monetary policy tightening at its March 23 meeting amid heightened global uncertainties. Diokno said that recent global developments in the banking sector are likely to prompt other central banks to ease further policy tightening. Meanwhile, the finance chief said he is optimistic that inflation could ease to 4% by the end of 3Q22 citing declining oil prices, the stronger peso, and mechanisms put in place by the government to control food prices.

The National Economic and Development Authority (NEDA) released the implementing rules and regulations for RA 11647, which will amend the 85-year-old Public Service Act. Upon effectivity on April 4, RA 11647 will allow full foreign ownership in telecommunications, domestic shipping, railways and subways, airlines, expressways and tollways, and airports. These sectors were previously limited to 40% foreign ownership.

INDUSTRY UPDATE

BANKING & FINANCE

BSP governor Felipe M. Medalla declared that Philippine banks are not affected by Silicon Valley Bank’s collapse as they have mostly loans, Philippine dollar bonds & sovereign bonds of countries with high credit ratings. The Bankers Association of the Philippines added that no substantial or material impact is expected on the local banking industry either since current liquidity & capital ratios exceed BSP standards. 

The Bangko Sentral ng Pilipinas (BSP) has confirmed that the Philippine banking sector is well-equipped to tackle possible effects of the US banking crisis. They commented that, compared to US banks, Philippine banks have a more stable asset base and loans that are less sensitive to changes in fair value. Furthermore, PH banks have higher liquidity and deposits, resulting in a lower risk relative to those in the US. SVB’s security holdings in proportion to its capital are larger than that of PH lenders. Lastly, the BSP added that they will continue monitoring developments closely and there is no material exposure outside the country for PH banks.

TELECOMMUNICATIONS

PLDT Inc. (TEL) disclosed yesterday that it entered into a Sale and Purchase Agreement to acquire 100% of Sky Cable Corporation’s issued and outstanding common shares at Php4.90/sh. This translates to a purchase price of Php6.75 bn for the Sky business from ABS-CBN Corp. (ABS). Sky provides broadband services under the brand “Sky Fiber” and enterprise broadband services under “Sky Biz.” 

ENERGY

ACEN Corp. (ACEN) announced that their JV with UPC Renewables (Asia Pacific Focused RE Company) has signed a purchase and sale agreement with GlidePath (Chicago Based RE Firm) for the acquisition of a portfolio of eight operating wind projects in northern Texas, USA. The combined capacity of the 8 projects total 136MW. This represents 3.5% of ACEN’s attributable capacity.

  Philippine Stock Exchange

The PSEi inched up 65.81pts (+1.01%) to close at 6,602.17 and up 2.05% WoW after the BSP raised policy rates by 25bps.

Trading ended mixed for the sectoral indices, with advances led by Services (+2.33%), and Holdings (+1.14%) while Mining & Oil (-0.25%) and Financials (+0.15%) closed mostly flat.

 Value turnover improved to P4.3Bn while foreign flows were positive (+P570Mn). Top index gainer was ICT (+6.07%) and top index decliner was BPI (-3.79%).