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China Banking Corporation to hold annual stockholders meeting in April
China Banking Corporation (Chinabank) will conduct its annual stockholders' meeting in a hybrid format, a combination of in-person and remote attendance, on April 18, 2024, Thursday at 4 p.m......»»
China Bank nets record P22 billion
Higher core business revenues boosted the net income of Sy-led China Banking Corp. by 15 percent to hit an all-time high of P22 billion in 2023......»»
China Bank beefs up remittance business
China Banking Corp. is further beefing up its global remittance business through a partnership with a leading financial technology service business in Thailand......»»
Chinabank’s 9-month net income reaches P16.2B
China Banking Corporation, also known as Chinabank, reported a net income of P16.2 billion for the first nine months of 2023, a 10% increase compared to the same period last year. The bank's strong performance was attributed to growth in core businesses and lower loan loss provisions. In the third quarter alone, Chinabank recorded profits of P5.4 billion, a 16% increase from the previous year. The bank's President and CEO, Romeo D. Uyan, Jr., credited the success to effective business strategies and efficient operations. Net interest income grew by 16% to P39.2 billion, while total credit provisions were reduced to P1.3 billion. Despite this, Chinabank maintained a better-than-industry non-performing loans (NPL) cover of 126%. Operating expenses increased by 14% to P20.5 billion, driven by manpower and inflation-related expenses. Chinabank remains the 4th largest private domestic bank with total assets of P1.4 trillion. Gross loans grew by 10% to P765 billion, with consumer loans experiencing a 19% expansion. The bank's NPL ratio remained manageable at 2.2%. Total deposits increased by 14%.....»»
China Bank profit hits P16.2 billion in 9 months
China Banking Corp. grew its earnings by 10.2 percent to P16.2 billion from January to September versus last year’s P14.7 billion on the back of robust growth from core businesses and lower loan loss provisions......»»
Phl economy still strongest this year — RCBC
The Philippine economy will remain among Asia’s strongest in the fourth quarter despite a possible higher interest rate because of strong consumer demand for certain products and services and more employed Filipinos, the chief economist of Rizal Commercial Banking Corporation said Saturday. “This growth forecast is still among the fastest in the region because our economy is doing well,” RCBC’s Michael Ricafort said. The World Bank recently downgraded this year’s Philippine economic growth to 5.6 percent from 6 percent due to inflation risks, apart from lower government spending and weaker demand for exports. However, it is still higher than China’s 5.1 percent, Indonesia’s 4.9 percent, and Malaysia’s 4.3 percent growth forecast. Ricafort said the Bangko Sentral ng Pilipinas (BSP) might raise its policy rate this year to slow inflation to 4 percent by year-end after it accelerated again to 6.1 percent last month. “The BSP is working to bring down prices of goods and services. As an unintended consequence, the economy could slow down. Borrowing costs for business owners also increase and consumer demand weakens,” he said. Ricafort said global oil prices have started falling which could discourage the central bank from raising its rate drastically. “Global oil prices have declined to $82 to $83 per barrel from a peak of $95 per barrel last month or since the war between oil-rich countries Russia and Ukraine began,” the economist said. He also expected a downtrend in rice prices starting this month as he said local farmers have begun collecting fresh harvests. “Inflation quickened last month mainly from higher prices of rice which accounted for nearly 9 percent of the inflation basket and grew 17 percent year-on-year,” Ricafort said. While a higher interest rate aims to slow consumption, Ricafort said the continued flow of remittances from overseas Filipino workers, or at least 3 percent growth yearly will still support substantial levels of consumer spending, especially during the Christmas season. “That is more than $40 billion a year. That’s the fourth largest in the world after India, China and Mexico,” the economist said. He added more Filipinos or 800,000 could earn from business process outsourcing or BPO this year as the industry’s revenue could rise from $32.5 billion to $59 billion based on data from the Contact Center Association of the Philippines. Another growth area is tourism, which Ricafort said saw 4 million foreign visitors last month, nearing the 4.8 million full-year target of the government. He added higher productivity among Filipinos is also expected as the country’s unemployment rate declined to 4.4 percent in August from 4.8 percent in July, based on data from the Philippine Statistics Authority. Moving forward, Ricafort said the government must improve science and technology education for higher quality jobs and increase spending on infrastructure amid the full reopening of most economies. “We are now fully reopened. Students are also back in schools which encourages putting up food businesses. Labor market in the US also improved which will affect export trade,” he said. Ricafort added the government could continue distributing financial and other assistance to farmers to control inflation. He believed the inflation rate will approach 3 percent next year, close to the ideal 2 percent for healthier economic growth. The post Phl economy still strongest this year — RCBC appeared first on Daily Tribune......»»
Uy inks debt-restructuring deal with Chinabank
PH Resorts Group Holdings Inc, the listed tourism and gaming company of Davao-based tycoon Dennis Uy, has been given a new lease on life after signing a debt restructuring arrangement with Sy-led China Banking Corp. and finding a potential white knight for its $600 million Emerald Bay casino resort in Cebu......»»
Uy resort units chart recovery
Subsidiaries of Davao businessmen Dennis Uy resort developer PH Resorts Group Holdings Inc. said it has restructured its indebtedness with China Banking Corp., or Chinabank. The debts were streamlined through the execution of agreements for the sale, leaseback, with option to buyback certain land and improvements of its subsidiaries. The restructuring covers the property of the subsidiaries in Lapu-Lapu City, Mactan, Cebu, with an area of approximately 12.5 hectares, plus improvements. The consideration for the investment and resulting percentage of ownership are still subject to final negotiations by the Parties, which are expected to be completed within 60 days, based on the MoU. P3.1-B bridge loan The restructuring also allows the subsidiaries to repay the P3.1-billion bridge loan facility extended by Chinabank in 2018, while, at the same time, grants them continued possession and use over the property to finish the construction and development of the Emerald Bay Project. In addition, the option to buy back of the restructuring allows the subsidiaries or its nominees to reacquire the properties. Lapulapu Leisure Inc. and Lapulapu Land Corp., the two units of Resorts Group Holdings also signed a memorandum of understanding with Cebu-based property developer AppleOne Properties Inc. The MoU establishes broad parameters whereby AppleOne can make an investment in the subsidiaries, with the intention of obtaining most of the equity interest in the subsidiaries, or an asset purchase of the land and improvements of the Emerald Bay Project. The post Uy resort units chart recovery appeared first on Daily Tribune......»»
China Bank to infuse P2 billion in thrift bank arm
Listed China Banking Corp. is infusing an additional P2 billion to its thrift banking arm to bankroll sustained loan expansion and boost its ability to serve more segments of the banking population......»»
Alibaba announces surprise departure of ex-CEO
Chinese e-commerce giant Alibaba has announced the surprise departure of former CEO Daniel Zhang, who had been set Monday to take charge of a key subsidiary as the firm undergoes a major restructuring. Hangzhou-based Alibaba is one of China's most prominent technology firms, with business operations spanning cloud computing, e-commerce, logistics, media and entertainment, and artificial intelligence. After years of turbulence in the Chinese tech sector, Alibaba in March announced the biggest restructuring in its history, dividing itself into six entities, with the goal of listing them on the stock exchange separately. CEO Daniel Zhang was due to take charge of the firm's new cloud computing branch, now a separate entity, on Monday. But two months after announcing his appointment, Alibaba said its ex-boss was no longer with the company. "The board of our Company expresses its deepest appreciation to Mr. Zhang for his contributions to Alibaba Group over the past 16 years," the company said in a statement to the Hong Kong Stock Exchange, where it is listed, late on Sunday. It gave no reason for his departure. Plans for a spin-off cloud computing firm would go ahead, Alibaba said, "under a separate management team to be appointed". The company announced in June that Zhang would be replaced by Joseph Tsai as chairman and Eddie Wu as CEO. The executive played a vital role in the company's success in the past decade, spearheading the now hugely popular Singles' Day shopping festival since its first edition in 2009. Shares in the firm sank nearly 3.5 percent Monday -- the first working day of its new reorganization into six distinct branches. In addition to e-commerce and cloud computing, Alibaba's reach stretches into everything from logistics to media, entertainment and artificial intelligence. But its vast size brought it into the crosshairs of Chinese regulators as Beijing sought to crack down on the tech sector. In 2020, Alibaba became the country's first tech giant to bear the brunt of increased oversight, when authorities called off what would have become one of the most valuable public listings in history -- valued at $34 billion -- for its former subsidiary Ant Group. Ant Group is the owner of Alipay, a mobile payment application widely used in China. One month after officials hit the brakes on its IPO, Alibaba was investigated for alleged anti-competitive practices, then issued a $2.8 billion fine. And in July authorities fined Ant Group nearly $1 billion for breaching banking regulations. The post Alibaba announces surprise departure of ex-CEO appeared first on Daily Tribune......»»
China Bank leverages AI to hike work productivity
China Banking Corp. is leveraging artificial intelligence via the CHIB GPT, its first AI solution, to boost employee production as it marked its 103rd anniversary......»»
Crackdown vs text blasters up
The Department of Information and Communications Technology, or DICT, is cracking down on fraudsters who use cheap, China-made text-blasting machines to boost the electoral campaigns of their clients. DICT Undersecretary Alex Ramos said they will clamp down on the proliferation of scam and spam messages plaguing users despite the SIM Registration Act being in place. It will also be timely as the barangay and youth elections are near, he added. Ramos recalled that government authorities had previously confiscated text blast machines used to send messages en masse to multiple mobile numbers. “Those text machines were very popular during campaign periods and they are now very cheap. We [have] seized a lot of these machines,” he said. Despite having a SIM law, fraudsters are still able to find new ways to hack into phones and computers, this time using over-the-top or OTT media services such as chat apps, which are outside the scope of telco filters. The DICT official urged consumers to be more proactive and not fall for various online ruses by malevolent players capitalizing on the increasing shift by people to a digital lifestyle. Cybercriminals use the target’s full name and pretend to be messaging them about a missed connection or make various offers. They create a sense of familiarity and trust in an attempt to start a conversation. The SIM Registration Act was envisioned to address escalating cybercrime in the country, including the proliferation of smishing and other forms of scam and spam messaging. The law mandated all mobile phone and prepaid broadband users to register their SIMs by 25 July or face SIM deactivation. A deactivated SIM card can potentially affect several aspects of a person’s life. For instance, it will cut their access to online banking, e-commerce, transportation, healthcare, education, and entertainment, among other things. The post Crackdown vs text blasters up appeared first on Daily Tribune......»»
Analysts predict inflation rate at around 5.0% for August
The country's inflation rate will remain above the government's 2 to 4 percent target band, said private sector economists who slightly upgraded their price-rise forecasts for August. A DAILY TRIBUNE poll of analysts over the weekend yielded a median estimate of 5.0 percent for August inflation, within the 4.8 to 5.6 percent forecast given by the Bangko Sentral ng Pilipinas (BSP) last Thursday. If the August number matches the poll consensus, the median estimate will be higher than the 4.6 percent print in July 2023 but lower than the 5.4 percent inflation rate in June 2023. The Philippine Statistics Authority is expected to release the August inflation data on Tuesday, 5 September. Bank of the Philippine Islands's lead economist Emilio "Jun" Neri Jr. said higher prices of liquefied petroleum gas (LPG), kerosene, diesel and vegetables likely drove the Consumer Price Index much higher month-on-month. "Lower electricity (and) other food items may offset some of this," Neri said in an email to Daily Tribune. Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the country's higher local palay and rice prices are one of the "main catalysts" for the August inflation print due to weather disturbances in most Southeast Asian countries affecting rice exports. He added that the agriculture damages caused by tropical storms in Northern and Central Luzon likewise affected the prices in the country. Ricafort likewise attributed the higher fuel prices and depreciating Philippine Peso against the US Dollar to the slightly higher inflation rate for August. "However, these are offset by mostly softer economic data in China and other countries, as partly weighed by higher inflation that reduced household spending and higher interest rates that led to higher borrowing costs," Ricafort said in a Viber message. Security Bank's senior assistant vice president and chief economist Robert Dan Roces also shared the same insights with other economists, saying that the primary factors contributing to the slight increase in the August inflation print are fuel and food prices. "Although the current diesel pump price is significantly lower than the P75 per liter average recorded in June of the previous year, food and fuel prices remain the main drivers of inflation. Notably, farm gate prices of other food items decreased in August compared to July," Roces said in an email. Despite these factors, Roces said the retailers may either be reluctant to reduce current prices or the price reduction price may be taking some time. Roces also underscored that the current inflation increase is mainly driven by the price of rice, which has recently surged by up to P10 per kilo. "Looking ahead, we still see that inflation will fall into the Bangko Sentral ng Pilipinas (BSP) target range of 2 percent to 4 percent by the fourth quarter of this year, barring sustained spikes in rice and fuel in the remaining months of 2023," Roces said. China Banking Corp. chief economist Domini Velasquez said core inflation is expected to continue its downtrend to around 6.0 percent in August despite the projected higher headline rate. "If realized, we do not expect BSP to react immediately to the expected inflation print with higher policy rates. Shocks for August were largely supply-side but have not, so far, detailed the inflation path toward the target range in (the fourth quarter). We still expect inflation to fall within the BSP's target by November," Velasquez said. The post Analysts predict inflation rate at around 5.0% for August appeared first on Daily Tribune......»»
Slower Q2 growth as inflation bites
The economy may have slowed further in the second quarter, private economists said, as persistent inflation and higher interest rates continued to affect consumer spending. Forecasts in the survey conducted by Daily Tribune spanned from 5.6 percent to 6.1 percent, yielding a median estimate of 5.9 percent gross domestic product, or GDP, growth from April to June this year. The economy grew by 6.4 percent in the first quarter, the weakest growth rate since the first quarter of 2021, when it contracted by 3.8 percent. This year’s first quarter growth is slower than the 8 percent increase in the same period last year and the 7.1 percent growth in the preceding quarter. The Philippine Statistics Authority is scheduled to report the second quarter GDP growth data on Thursday, 10 August. Security Bank: 6.1% growth Security Bank’s senior assistant vice president and chief economist Robert Dan Roces expects the Philippine economy to grow by 6.1 percent in the second quarter. He added growth may have been driven by the still robust consumer spending and improved exports. “Private investments continued in the second quarter, supporting economic activity, while low government consumption served as a dampener,” Roces said in an emailed commentary. “The downside risks to growth include the risks to sticky inflation, elevated interest rates, and weaker global economic growth,” Roces added. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., who predicted a 6 percent growth, noted the stronger consumer spending and election-related expenditure amid easing pandemic restrictions, but not without flagging the impact of inflation in the second quarter. He also said that the lower individual income tax rates that went into effect earlier this year might have caused the increase in consumer spending. “Lower individual income tax rates starting January 2023 for most income brackets as part of the TRAIN Law, could lead to increased consumer spending, which accounts for at least 75 percent of the economy, and, in turn, lead to faster economic growth,” Ricafort told Daily Tribune in a Viber Message. China Banking Corp. chief economist Domini Velasquez expects a 5.9 percent GDP growth due to some factors, including higher inflation, which could have offset post-pandemic spending, and lukewarm government spending. “We saw substantial increases in infrastructure spending, but both PS and MOOE growth remained lukewarm,” Velasquez said in a Viber message. “There is a need to hasten government spending in identified agencies lagging behind.” Moving forward, Velasquez expects continued moderation in economic activities as elevated policy rates impact business and household spending. In the third quarter of this year, Velasquez expects the country’s economy to grow to around 5.5 percent and full-year growth to average 5.8 percent, just shy of the government’s 6.0 percent low-end target. In a virtual briefing last 19 July, First Metro Investment Corp. and the University of Asia and the Pacific that the Philippine economic growth likely slowed to 5.6 percent in the second quarter. “I do expect a slowdown in the second quarter to 5.6 percent,” UA&P economist Victor Abola said in the virtual briefing. “It’s really the carryover of inflation to the second quarter; even though it’s lower, people are still a bit more reluctant,” he added. While consumption is expected to slow down in the second quarter, Abola expects a rebound in the second half of the year. The post Slower Q2 growth as inflation bites appeared first on Daily Tribune......»»
Phl economic growth may slow in Q2
The Philippine economy may have slowed further in the second quarter of 2023, private economists said, as persistent inflation and higher interest rates continue to affect consumer spending. Forecasts in the survey conducted by Daily Tribune spanned from 5.6 to 6.1 percent, yielding a median estimate of 5.9 percent gross domestic product (GDP) growth from April to June this year. For context, the Philippine economy grew by 6.4 percent in the first quarter, the weakest growth rate since the first quarter of 2021, when it contracted by 3.8 percent. This year's first quarter GDP growth is slower than the 8 percent increase in the same period last year and the 7.1 percent growth in the preceding quarter. The Philippine Statistics Authority (PSA) is scheduled to report the second quarter GDP growth data on Thursday, 10 August. Security Bank's Senior Assistant Vice President (SAVP) and Chief Economist Robert Dan Roces, who expects the Philippine economy to grow by 6.1 percent in the second quarter of 2023, said the growth may have been driven by the still robust consumer spending and improved exports. "Private investments continued in the second quarter, supporting economic activity, while low government consumption served as a dampener," Roces said in an emailed commentary. "The downside risks to growth include the risks to sticky inflation, elevated interest rates, and weaker global economic growth," Roces added. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., who expects a 6.0 percent growth, noted the stronger consumer spending and election-related expenditure amid looser pandemic restrictions, but not without flagging the impact of inflation in the second quarter this year. He also said that the lower individual income tax rates that went into effect earlier this year might have caused the increase in consumer spending. "Lower individual income tax rates starting January 2023 for most income brackets as part of the Train Law, could lead to increased consumer spending, which accounts for at least 75 percent of the economy, and, in turn, lead to faster economic growth," Ricafort told Daily Tribune in a Viber Message. Meanwhile, China Banking Corp. chief economist Domini Velasquez expects a 5.9 percent GDP growth due to some factors, including higher inflation, which could have offset post-pandemic spending, and lukewarm government spending. "We saw substantial increases in infrastructure spending, but both PS and MOOE growth remained lukewarm," Velasquez said in a Viber message. "There is a need to hasten government spending in identified agencies lagging behind." Moving forward, Velasquez expects continued moderation in economic activities as elevated policy rates impact business and household spending. In the third quarter of this year, Velasquez expects the country's economy to grow to around 5.5 percent and full-year growth to average 5.8 percent, just shy of the government's 6.0 percent low-end target. In a virtual briefing last 19 July, First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) that the Philippine economic growth likely slowed to 5.6 percent in the second quarter. "I do expect a slowdown in the second quarter to 5.6 percent," UA&P economist Victor Abola said in the virtual briefing. "It's really the carryover of inflation to the second quarter; even though it's lower, people are still a bit more reluctant," he added. While consumption is expected to slow down in the second quarter, Abola expects a rebound in the second half of the year. The post Phl economic growth may slow in Q2 appeared first on Daily Tribune......»»
China Bank profit rises to P11 billion
Earnings of China Banking Corp. went up by seven percent to nearly P11 billion in the first semester on the back of higher revenues and lower credit provisions......»»
Inflation’s upside risks not ruled out as BSP set to decide on rate hike
Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona said that the country is "not out of the woods" yet and that the central bank will decide on rate hikes this month, even though inflation rates have decreased recently. Data from the Philippine Statistics Authority (PSA) showed on Friday that consumer price growth eased in July as the economy continued to deal with the effects of strong interest rate hikes. Inflation slowed to 4.7 percent year-on-year in July, less than the 5.4 percent seen in June and the 6.4 percent seen a year earlier. "We're looking very carefully at the numbers. So far, inflation rates have been coming down but there's upside risks. And so, we're not out of the woods," the newly appointed governor said in a television interview. But Remolona said that if the numbers show that rates need to be adjusted, BSP is ready to do so at their next policy meeting on 17 August. Remolona also said that the recent policies of nearby Asian countries like India, Thailand, and Vietnam, which raise the prices of goods, add to the pressure on rates. "We're not out of the woods yet because of these kinds of factors, supply side factors," he noted. "We're continuing to watch the data and we're gonna be ready to raise if necessary," he added. Meanwhile, ING Bank in Manila senior economist Nicholas Antonio Mapa mentioned that easing inflation is not enough to prompt the central bank to start cutting rates. “Furthermore, with the BSP currently holding on to a relatively narrow 75bps spread of the Fed, we believe that any decision to reverse into easing mode will still be tied to potential rate cuts by the Fed,” he said in an emailed commentary. “Thus, BSP is projected to be on hold in the near term while monitoring domestic price trends and global developments such as moves by major central banks like the Fed,” Mapa added. China Banking Corp. chief economist Domini Velasquez expects the BSP to maintain its rate pause stance, even considering the rate differential with the US Federal Reserve's 5.25 to 5.5 percent range. "Although inflation is still expected to fall below the BSP's 4.0% target by October, upside risks are increasing. Higher rice prices both domestically and globally is the key risk," she said in a Viber message. The post Inflation’s upside risks not ruled out as BSP set to decide on rate hike appeared first on Daily Tribune......»»
Chinabank posts P10.8B in net profits, seven percent increase from last year
Sy-led bank China Banking Corporation sustained its profitability in the first half of 2023, thanks to strong revenue and decreasing non-performing loan provisioning. In a disclosure posted to the Philippine Stock Exchange on Thursday, Chinabank announced a seven percent increase in net profits to P10.8 billion in the first six months of 2023 compared to the P10.1 billion made during the previous year. The bank reported its earnings with a return on equity of 15.9 percent and a return on assets of 1.6 percent. Chinabank also reported overall revenues of P27.2 billion, an increase of 8% from P25.2 billion year over year. The provision for loan losses was P878 million, a 47 percent decrease from P1.7 billion a year earlier, "as the economy continues to recover." "Our customer focus and disciplined operational execution enabled us to continue to deliver strong results to all our stakeholders," Chinabank president and CEO Romeo Uyan Jr. said. Meanwhile, Chinabank's total assets amounted to P1.4 trillion, up 15 percent from P1.2 trillion. Net loans grew by 11 percent to P726 billion on stronger demand from the consumer sector, up 20 percent, and the business sector, up 8 percent. Chinabank said its asset quality remained stable, with the non-performing loans ratio easing to 2.2 percent, "which was lower than the latest industry average." Likewise, Chinabank's total deposits increased by 19 percent to P1.1 trillion. The post Chinabank posts P10.8B in net profits, seven percent increase from last year appeared first on Daily Tribune......»»
New record high: Phl debt at P14.15T in June
The Philippine national government's debt stock reached another record high of P14.15 trillion in June as new domestic borrowings exceeded payments made, the Bureau of Treasury said on Tuesday. Data from the state treasury bureau showed that the country's debt portfolio increased by P51.31 billion or 0.4 percent compared to the previous month, primarily due to the net issuance of domestic securities. Of the total debt stock, 31.4 percent was sourced externally, while 68.6 percent were domestic borrowings. The BTr said the country's domestic debt reached P9.70 trillion, P114.32 billion or 1.2 percent higher than the end-May 2023 level. For the month, domestic debt growth amounted to P114.32 billion due to the net issuance of government bonds driven by the NG's financing requirements. Year-to-date, domestic debt has an increment of P494.44 billion or 5.4 percent The national government's external debt amounted to P4.45 trillion, P63.01 billion or 1.4 percent lower than the previous month. "The reduction in foreign debt was driven by the impact of currency adjustments affecting both USD (US Dollar)- and third-currency equivalents leading to a decrease in the peso value of the debt, amounting to P69.98 billion and P8.28 billion, respectively," the BTr said, adding that these offsets the availing of foreign loans worth P15.25 billion. NG's external debt likewise increased by P234.55 billion or 5.6 percent from the end-December 2022 level. Total NG guaranteed obligations decreased by P9.98 billion or 2.6 percent month-on-month to P369.73 billion as of June 2023. For the month, the decline in guaranteed debt was attributed to the net repayment of both domestic and external guarantees amounting to P4.36 billion and P0.89 billion, respectively. "This was further trimmed because of the effect of currency adjustments on both USD- and third- currency-denominated guarantees amounting to P2.78 billion and P1.95 billion, respectively," BTr said. From the end-December 2022 level, NG guaranteed debt has decreased by P29.32 billion or 7.3 percent. In an emailed commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the latest net borrowings of the national government may reflect the need to finance the still relatively wider budget deficits in recent months partly due to the lower individual tax rates for most income brackets since the start of 2023. "New official development assistance and other multilateral funding, especially for the country's various infrastructure projects, would also add to the country's outstanding national government debt in the coming months," Ricafort said. China Banking Corp. chief economist Domini Velasquez echoed Ricafort's comment in another Viber message, saying that the government had to incur debt in a high-interest rate environment in the first six months of the year to finance government projects and programs and augment budget deficits. "On a positive note, we think market interest rates are already on a downtrend as domestic inflation moves down and major central banks near the end of their tightening cycles. This will help dampen debt growth," Velasquez said. The post New record high: Phl debt at P14.15T in June appeared first on Daily Tribune......»»
Private sector analysts predict inflation rate to dip below 5 percent
Private economists expect the country's inflation rate to ease further for the sixth consecutive month in July from the 5.4 percent inflation rate last June. A Daily Tribune poll of six (6) private sector analysts yielded a median estimate of 4.8 percent for July inflation. The Philippine Statistics Authority (PSA) is expected to unveil inflation data in the first week of August. Economists expect inflation to dip below five percent, marking the first time since April 2022, when the average headline inflation was 4.9 percent. Security Bank chief economist Robert Dan Roces and China Banking Corp. chief economist Domini Velasquez said inflation likely softened to 4.7. In an emailed commentary, Roces elaborated that the deceleration in the consumer price index (CPI) suggests a moderate level of inflation. "The favorable base effects that helped offset the increase in food prices may continue to play a role in keeping inflation in check in the short term," Roces said. For her part, Velasquez said lower utility rates offset higher food and fuel prices. She mentioned that electricity rates in all regions fell substantially from the previous month, especially in Mindanao and Batangas. Velasquez added that a stronger peso in July could have also led to the "muted" monthly inflation rate. ING Bank lead economist Nicolas Mapa, who said that headline inflation averaged 4.8 percent in July, mentioned that Bangko Sentral ng Pilipinas (BSP) would consider the data point alongside the path of inflation against developments such as the recent US Federal Reserve's hike in its subsequent decision. Philippine National Bank economist Alvin Arogo said inflation would likely to 4.9 percent in July amid the month-on-month increase due to the minimum wage hike in Metro Manila and the rise in pump prices due to Dubai crude. Arogo said the favorable base effects will continue to be the main driver for the monthly print of year-on-year price growth to be lower than four percent in the fourth quarter amid the "persistence of second-round effects." Bank of the Philippine Islands (BPI) lead economist June Neri, who said that inflation in July likely eased to 4.9 percent in July, mentioned it would fall within the two to four percent target range of the BSP by the fourth quarter. "Such a print suggests that a sub-four percent monthly print by October or November is possible and increases the chances that the BSP can keep policy rates steady for the balance of 2023," Neri said. Meanwhile, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the inflation rate for July likely slowed at 5.1 percent as the recent increase in local rice prices would also slow down the easing trend of "disinflation" at the very least. He said that the possible reduction of rice imports by the Philippines would also coincide with the adverse effects of the El Niño drought, especially from the fourth quarter of 2023 to the first quarter of 2024, potentially reducing local rice production. Ricafort added that the weather phenomenon would also lead to some uptick in local rice prices and overall inflation. However, the country's new central bank said it is still too early to declare victory in the battle to curb consumer price pressures as upside pressures on expenses remain high amid downtrend data, the country's new Speaking at a recent banking community event, BSP governor Eli Remolona said the persisting upside risks to inflation indicate the monetary authority remains open to further tightening. The country's core inflation, which primarily excludes food and fuel expenses, hit 7.4 percent in June. Last month's data declined from May's 7.7 percent to April's 7.9 percent. "Nonetheless, it's too soon to declare victory. Core inflation remains high. There are still upside risks to inflation – for example, risks in the form of El Niño and further supply shocks," Remolona said. Remolona stated that the inflation figures will factor into the analysis conducted by the Monetary Board. He added that data will play a crucial role in influencing their policy rate decision. "We will wait and see. We will analyze the data as they arrive, and that analysis will decide monetary policy down the road," the Central Bank chief mentioned. On the sidelines of the same banking event, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said he expects inflation to continue easing in the coming months but warned that there are still risks to the outlook. Balisacan said that the current downward trend in inflation is expected to continue, but some factors could worsen it. These include rising oil prices and the impact of Typhoons Egay and Falcon on agricultural production. "We are still monitoring the situation, but we hope that the impact of the typhoon will not be too serious," Balisacan said. The post Private sector analysts predict inflation rate to dip below 5 percent appeared first on Daily Tribune......»»