Standard Chartered cuts PH growth forecast for 2017

MANILA- Lower-than-expected growth of the Philippine economy in the first quarter of 2017, at 6.4 percent from quarter-ago’s 6.6 percent, made Standard Chartered Bank cut its full year forecast for the country but expects better output in the second half of the year.

In a briefing Tuesday, Standard Chartered ASEAN Economic Research head Edward Lee cited the bank’s report entitled Global Focus � Q3-2-17 Swans, bulls and bears, wherein the British multinational banking and finance institution projected domestic growth to be at 6.5 percent from 6.8 percent previously.

The report said weak investment growth is the reason for the adjustment in the growth forecasts.

It, however, expects growth to post better output in the second half of the year on better investment performance.

Lee attributed the weak contribution of investments on growth from January to March this year to mark-to-market issue as volatilities in the global financial markets, in line with the development in the US, Europe and China, affected investors’ risk appetite.

He, on the other hand, said consumer spending, which is among the major domestic growth drivers, remained relatively stable.

So I’m looking at much gains is in investments (for the second half), he said.

Amid the cut on the bank’s 2017 growth projection for the country, the report expects the Philippines to be among the robust economy in the Association of Southeast Asian Nations (ASEAN) this year.

Robust domestic demand and steady services-sector growth should continue to provide support, it said.

Inflation is seen to have reached its peak this year when it hit 3.4 percent last March and April.

In the first half of the year, rate of price increases averaged at 3.1 percent, slightly above the mid-point of the government’s two to four percent target for 2017 until 2020.

Last June alone, inflation further slowed to 2.8 percent from month-ago’s 3.1 percent.

This deceleration made Lee discount any change in the Bangko Sentral ng Pilipinas’ (BSP) policy rates this year.

To date, the BSP’s overnight borrowing or reverse repurchase (RRP) rate is three percent, the overnight lending or repurchase (RP) rate is 3.5 percent and the rate of the special deposit account (SDA) facility is 2.5 percent.

These three represent the central bank’s interest rate corridor, with the SDA as the floor rate, the RRP as the key rate and the RP as the ceiling rate.

Lee said possible developments that might impact on their BSP rate forecast is improvement of global economic outlook and uptick in the inflation rate.

He expects inflation to average at three percent in the second half of the year.

He, however, clarified that any possible increase in the inflation rate is seen to be caused by demand-side factors because of increasing domestic requirement but not supply side factors.

Source: Philippine News Agency

Standard Chartered cuts PH growth forecast for 2017

MANILA- Lower-than-expected growth of the Philippine economy in the first quarter of 2017, at 6.4 percent from quarter-ago’s 6.6 percent, made Standard Chartered Bank cut its full year forecast for the country but expects better output in the second half of the year.

In a briefing Tuesday, Standard Chartered ASEAN Economic Research head Edward Lee cited the bank’s report entitled Global Focus � Q3-2-17 Swans, bulls and bears, wherein the British multinational banking and finance institution projected domestic growth to be at 6.5 percent from 6.8 percent previously.

The report said weak investment growth is the reason for the adjustment in the growth forecasts.

It, however, expects growth to post better output in the second half of the year on better investment performance.

Lee attributed the weak contribution of investments on growth from January to March this year to mark-to-market issue as volatilities in the global financial markets, in line with the development in the US, Europe and China, affected investors’ risk appetite.

He, on the other hand, said consumer spending, which is among the major domestic growth drivers, remained relatively stable.

So I’m looking at much gains is in investments (for the second half), he said.

Amid the cut on the bank’s 2017 growth projection for the country, the report expects the Philippines to be among the robust economy in the Association of Southeast Asian Nations (ASEAN) this year.

Robust domestic demand and steady services-sector growth should continue to provide support, it said.

Inflation is seen to have reached its peak this year when it hit 3.4 percent last March and April.

In the first half of the year, rate of price increases averaged at 3.1 percent, slightly above the mid-point of the government’s two to four percent target for 2017 until 2020.

Last June alone, inflation further slowed to 2.8 percent from month-ago’s 3.1 percent.

This deceleration made Lee discount any change in the Bangko Sentral ng Pilipinas’ (BSP) policy rates this year.

To date, the BSP’s overnight borrowing or reverse repurchase (RRP) rate is three percent, the overnight lending or repurchase (RP) rate is 3.5 percent and the rate of the special deposit account (SDA) facility is 2.5 percent.

These three represent the central bank’s interest rate corridor, with the SDA as the floor rate, the RRP as the key rate and the RP as the ceiling rate.

Lee said possible developments that might impact on their BSP rate forecast is improvement of global economic outlook and uptick in the inflation rate.

He expects inflation to average at three percent in the second half of the year.

He, however, clarified that any possible increase in the inflation rate is seen to be caused by demand-side factors because of increasing domestic requirement but not supply side factors.

Source: Philippine News Agency

ASEAN to strengthen dialogue, partnership with China – DFA

MANILA– The Association of Southeast Asian Nations (ASEAN) is expected to issue two important outcome documents this week that would strengthen cooperation and dialogue with China, the Department of Foreign Affairs (DFA) said Tuesday.

In a Palace briefing, DFA spokesperson Robespierre Bolivar said the foreign ministers of ASEAN are expected to endorse the Framework on the Code of Conduct in the South China Sea as well as the extension of the ASEAN-China Center.

Bolivar said the foreign ministers will endorse the framework during their meeting on August 6 in Manila.

We have a commitment from ASEAN and China to finalize, to approve the framework of the Code of Conduct within the chairmanship year of the Philippines. Having said that, we expect that the foreign ministers will endorse the framework as it is currently approved by the senior officials last May, the DFA official said.

He said the endorsement of the framework is a very big step towards achieving the actual Code of Conduct.

The framework basically presents an outline of the Code of Conduct. So after it is endorsed, after the approvals process has been done, dealt with, we expect that the talks on the actual Code of Conduct will begin in earnest, Bolivar said.

Earlier, President Rodrigo Duterte has committed to complete a binding code of conduct in the South China Sea to avoid the escalation of tension in the region during the Philippines’ chairmanship year of ASEAN.

Duterte has repeatedly emphasized the importance of peace in the South China Sea, where around 80 percent of global trade passes through.

In the meantime, Bolivar said that the extension of the mandate of the ASEAN-China Center will further strengthen regional cooperation with China.

ASEAN maintains different “Centers” with several of its dialogue partners.

According to the DFA official, the ASEAN�China Center is responsible for facilitating functional cooperation between ASEAN and China in the field of academics, science and technology, cultural exchanges among others.

So we have an institution, if you will, that facilitates this cooperation and that is the Center. And the Ministers have decided to renew the mandate of the Center because I believe it expired late last year, he said.

I believe there will be a signing ceremony for the MOU (memorandum of understanding) on the extension of the mandate of the ASEAN�China Center. And that is a very concrete manifestation of the renewed commitment between ASEAN and China to further strengthen the partnership, Bolivar said.

Foreign ministers and senior officials from 27 countries will gather in Manila for the 50th ASEAN Foreign Ministers’ Meeting and Related Meetings at the Philippine International Convention Center on August 2 to 8.

According to Bolivar, the annual AMM and its related meetings bring together the foreign ministers of ASEAN; ASEAN Plus Three which is China, Japan, Korea; the East Asia Summit; and the ASEN Regional Forum; as well as the Post-Ministerial Conferences where ASEAN meets with each of its 10 dialogue partners.

Foreign Affairs Secretary Alan Peter Cayetano will chair the 50th AMM; the 18th ASEAN Plus Three Foreign Ministers’ Meeting; the 7th East Asia Summit Foreign Ministers’ Meeting; and the 24th ASEAN Regional Forum.

Source: Philippine News Agency