Economy update, 8.24.2009

By Randell Tiongson on August 24th, 2009

Nose bleed alert!

———-

As of 8.24.2009

1. Philippine rates kept steady

  • As expected the Philippine central bank kept overnight rates unchanged at its policy meeting Thursday.
  • COMMENT: This halts the easing cycle that has caused a 200 basis points cut since December.
  • The CB is expected to keep a wait and see attitude regarding Philippine economic growth, due to come out this Thursday.
  • The anticipated change in policy however does not deter any significant shift to fixed income investments.
  • Rates remain low (SDA rates below 3%) enough to keep risk appetite high for equity investments.

2. Philippine GDP bottomed out in 2Q09; data due this Thursday

  • According to NEDA, the Philippine economy continued to remain weak in the 2Q09.
  • NEDA sees gross domestic product in the second quarter to have shrunk as much as 0.1% or expanded up to 0.9% from a year earlier.
  • The economy expanded 0.4% in the first quarter from a year earlier.
  • The government is set to release second-quarter GDP data on Aug. 27.
  • Officials estimate that services sector is expected to have grown between 1.7% and 2.2% in the second quarter.
  • Agriculture likely expanded between 0.4% and 1.4%.
  • Industry however is projected to have contracted between 1.3% and 2.9%.
  • However, the NEDA expects the economy to have bottomed out in the second  quarter of 2009
  • Economy will be driven by campaign spending ahead of the elections in May 2010.
  • In 2007, election spending contributed around  0.34 percentage point to GDP growth.
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3 thoughts on “Economy update, 8.24.2009”

  • @ Raffy — sure bro, cant open the site thought, my anti-virus props up a warning whenever I try to

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Economy update, 8.24.2009