Central Bank seen to raise rates this week By Bianca Cuaresma
I
@BcuaresmaBM
N a recently published resea rc h note, econom ists from Standard Chartered said they now expect monetary policy normalization by the Central Bank to “begin earlier” and “move at a faster pace” after the solid growth rate posted by the country in the first quarter of this year. The Philippine economy grew at 8.3 percent in the first quarter of the year, the Philippine Statistics Authority (PSA) announced earlier this week. “The Q1 GDP [gross domes-
tic product] print validates the narrative that the Philippines’ economic recovery has gained traction,” Standard Chartered said, while also raising its GDP forecasts to 8 percent for this year from the previous 7.5 percent due to the strong first quarter performance. BSP Governor Benjamin Diokno has earlier released a forward guidance of monetary policy exit to the market, saying they will start pulling out from their accommodative rates in the second half of the year. In Diokno’s latest comment after the announcement of the country’s growth numbers, he
said they “[stand] ready to adjust [their] monetary policy settings, should [they] see material risk of these supply-side pressures spilling over to the demand side.” Standard Chartered said they now project six consecutive policy rate hikes of 25 basis points each, starting in May and ending in December, to bring the policy rate to 3.5 percent by end-2022. The bank previously expected BSP to start hiking in August, by 50 basis points in the third quarter and 25 basis points per quarter until the third quarter of 2023, to bring the policy rate to 3.5 percent.
“We do not rule out a 50 basis point hike at upcoming meetings if inflation surprises significantly to the upside [6 percent level]. However, our base case assumes that BSP will opt for a measured and gradual pace of rate hikes to support a sustainable economic growth recovery amid still-elevated uncertainty due to the Russia-Ukraine conflict, China’s slowdown, and global monetary policy normalization,” Standard Chartered said. The BSP is scheduled to have its monetary policy meeting on Thursday, May 19. This will be the third monetary policy setting meeting of the BSP for the year.
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Wednesday, May 18, 2022 Vol. 17 No. 222
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FINANCIAL CONSUMERS’ PROTECTION NOW A LAW n
By Samuel P. Medenilla
FI pledges down 54.1% to ₧8.98B in Q1–PSA
@sam_medenilla
A
MONG his last acts as chief executive, President Duterte signed into law a measure requiring financial service providers to strengthen mechanisms for protecting what the bill’s main sponsor described as “financial consumers’ rights to redress, information and privacy.” Duterte signed Republic Act (RA) No. 11765 or the Financial Products and Service Consumer (FPSC) Act, which will regulate financial service providers (FSP) and “investment providers” and giving regulators more muscle to run after the errant players. The new law tasked the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), Insurance Commission (IC), and the Cooperative Development Authority (CDA) to regulate FSPs. The so-called financial regulators will have the power to craft policies and conduct market surveillance and examination for FSPs. It could also impose restrictions on FSP which collect excessive and unreasonable interests, fees or charges, including all other interests, fees and charges covered under R A 10870 or the Philippine Credit Card Industry Regulation Law. Regulators were also allowed to sanction FSP, which violated the provisions of RA 11765 by disqualifying and/or suspending its executives or workers, imposition of fines or penalties, issuance of cease and desist order.
By Cai U. Ordinario
F RUBILEN AMIT bites her gold medal in women’s 9-ball of billiards. NONIE REYES
AMIT, CRAY, BARBOSA SCOOP GOLDS FOR PHL By Jun Lomibao
H
ANOI—Rubilen Amit, Eric Cray and Kurt Bryan Barbosa snatched gold medals on Tuesday and although the mints came in trickles, the Philippines remained in the thick of the fight for the second and third places in the 31st Southeast Asian Games. Amit topped the women’s 9-ball for the country’s first gold medal in billiards at the Hadong District Sporting Hall, a victory that was expected of the multiple champion of local and international pool crowns. Amit beat Singapore’s Jessica Chan, 7-2, in the finals, with the Philippines
guaranteed of another gold medal in men’s 9-ball as Carlo Biado faces Johann Chua in an all-Filipino finals on Wednesday. Tokyo Olympian Barbosa, on the other hand, defeated Jaijulla Panachai of Thailand, 16-7, to dominate the men’s -54 kgs Kyorugi of taekwondo at the Tay Ho Gymnasium in Hanoi. Barbosa immediately got a congratulatory handshake from Rep. Abraham “Bambol” Tolentino, president of the Philippine Olympic Committee which, like the Philippine Sports Commission, are fully supporting the Team Philippines campaign. Over at the My Dinh National Stadium, Cray proved his legs are ageless at 33
and annexed a seventh career gold medal by ruling the men’s 400 meters hurdles. Cray clocked 50.41 seconds to clinch
his fifth straight 400m hurdles’ SEA Games gold medal. He has won the event since 2013 in Myanmar. The Philippines has amassed 33 gold medals that went with 37 silvers and 46 bronzes as dusk set in on Tuesday, a haul that was good for third place behind host Vietnam and Thailand. The hosts continued to create separation in the race for the overall championship with 95 golds—with 62 silvers and as many bronzes—more than double the 40 golds the Thais have won so far. Singapore was six golds behind the Philippines with 27, while Indonesia had 26 and Malaysia 21 gold medals.
OREIGN investment pledges plunged in the first quarter of 2022 based on the latest data released by the Philippine Statistics Authority (PSA). PSA said Approved Foreign Investments declined 54.1 percent to P8.98 billion in the first quarter of 2022 from the P19.55 billion in the same period in 2021. The data was obtained from approved investments by the six investment promotion agencies (IPAs) such as the Authority of the Freeport Area of Bataan (Afab), Board of Investments (BOI), Clark Development Corporation (CDC), Cagayan Economic Zone Authority (Ceza), Philippine Economic Zone Authority (Peza), and Subic Bay Metropolitan Authority (SBMA). “No investment approvals were reported from BOI-Bangsamoro Autonomous Region in Muslim Mindanao [BOI-BARMM] for first quarter of years 2021 and 2022,” the PSA said. The data showed foreign investment commitments for the first quarter of 2022 were mainly driven by investments from Japan, which
See “Law,” A2
PESO exchange rates
@caiordinario
See “PSA,” A2
n US 52.4550 n japan 0.4064 n UK 64.6403 n HK 6.6822 n CHINA 7.7288 n singapore 37.7021 n australia 36.5664 n EU 54.7473 n SAUDI arabia 13.9843
Source: BSP (17 May 2022)