Philippines Microeconomic Weekly Update #33

MACROECONOMICS WEEKLY UPDATE

The national government’s budget surplus significantly increased to Php66.8 bn from Php4.9bn YoY, driven by a 26.7% rise in revenues to Php440.7 bn, primarily due to a 31.4% increase in tax revenues. Government spending also rose by 9% to Php373.9 bn, mainly due to subsidy releases and capital spending for PhilHealth, DPWH, and DoTr. The budget deficit for the first four months was reduced by 35% to Php204.1 bn. Inflation is expected to be lower in May compared to April, and despite the declining trend, the inflation rate for the first four months exceeded the BSP’s target range. The imposition of suggested retail prices for red and white onions is delayed pending validation of farmers’ costs. The Maharlika Investment Fund (MIF) bill, a controversial financial legislation, gained Senate approval and is now awaiting transmission to President Ferdinand Marcos Jr. for his signature.

INDUSTRY UPDATE

EXCHANGE NEWS 

The Philippine Stock Exchange (PSE)’s proposal to introduce short selling in the market has been given the green light by the Securities and Exchange Commission (SEC). Emilio Aquino, the SEC chairperson, expressed his agreement with the PSE’s standpoint that short selling could enhance liquidity in the margin. Currently, the two bodies are ironing out the specifics for the execution of this plan.

TELLECOMMUNICATIONS 

The National Privacy Commission (NPC) disclosed that unauthorized transactions on Globe’s GCash platform on May 8 resulted from phishing attacks. GCash pledged to rectify any deducted amounts and improve client education and awareness. Dito Telecommunity (DITO) extended its USD1.2 bn loan facility with two Chinese banks, which will be repaid through a long-term project financing facility worth USD3.9 bn currently being finalized by DITO’s management.

HOLDING COMPANIES

Shareholders of Metro Pacific (MPI) are not obliged to tender their shares to the consortium intending to privatize the company, even if they vote for the company’s delisting. If the voluntary delisting is approved, the tender offer process is expected to begin immediately.

PROPERTY AND CONSTRUCTION 

D.M Consunji, Inc.’s (DMCI) order book in Q1 grew 20% quarter on quarter to Php42.4 bn following the awarding of the second contract package of the South Commuter Railway Project.

BANKIG AND FINANCE 

The BSP will extend the alternative reserve compliance for small banks to avoid any negative impact after the relief measure ends on June 30. The BSP allowed banks to count their lending to MSMEs and pandemic-affected large enterprises as part of their alternative compliance with the reserve requirements during the pandemic.

LOCAL MARKET UPDATE

The PSEi recorded a daily growth of 1.27% to reach 6,512.01 but experienced a 0.28% decline on a weekly basis. All sectoral indices ended positively, with Holdings (+1.59%), Services (+1.46%), and Financials (+1.30%) leading the gains.

The value turnover exceeded Php4 billion, and there was a net foreign buying of Php219 million. The largest index gainers were AEV (+4.87%), MBT (+3.98%), and TEL (+3.80%), while MONDE (-1.63%) and UBP (-0.76%) were the biggest decliners.

 

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