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Today Bangko Sentral ng Pilipinas (BSP) reported the latest data on foreign portfolio investments.

In June 2008 foreign portfolio investments reached a net outflow of USD 145.6 million compared to a net inflow of USD 871.41 million in June 2007. For the first six months of 2008 foreign portfolio investments increased to a net outflow of USD 417.4 million compared to a net inflow of USD 2.552 million in the first six months of 2007.

About USD 466 million or 79% of the registered gross foreign portfolio investments inflow in June 2008 went to shares listed in the Philippine Stock Exchange (PSE), while only USD 279 million or 38% of the capital repatriation come from withdrawls of investments in PSE listed shares.

These lastest figures confirm that the inflow of “hot money” from foreign fund managers came to an end in the face of worsening risk profiles in emerging markets.

The United Kingdom, United States and Singapore remained the top three investor countries and collectively contributed 67% of investment funds during the first six months of 2008.

Today the Monetary Bord of Bangko Sentral ng Pilipinas (BSP) increased the key interest rates by 50 basis points. The interest rate for the overnight borrowing or reverse repurchase (RRP) facility was raised to 5.75% and the interest rate for overnight lending or repurchase (RP) facility was raised to 7.75%.

It the press release the central bank reaffirmed that in accordance with its mandate inflation control is the foremost priority of the BSP. The BSP’s baseline forecasts show the risk of inflation exceeding the inflation targets for 2008 and 2009. Price pressures have increased even as they are projected to ease starting late 2008.  Second-round effects have set in, as evident in the rise in core inflation. 

Additionally BSP raised its inflation estimate to a range of 9% to 11% today. Inflation may peak at 12% this October. In June inflation rate was already reported at 11.4%.

On June 5th the central bank already raised their key interest rates by 25 basis points. The next meeting of the Monetary Board is scheduled for August 28th, 2008.

Today Bank of Thailand raised its key interest rate by 0.25% to 3.50%. This decision was already expected by economists after inflation reached 8.9% last month.

After raising fuel prices consumer confidence dropped in Thailand and Finance Minister Surapong Suebwonglee already acknowledged that Thailand may not reach its GDP growth target of 6% since higher oil and food prices are a major threat to growth. In the first quarter of 2008 the economy still grew at a rate of 6%.

The stock market continued to fall among concerns of higher interest rates and more protests against Prime Minister Samak Sundaravej government.

Today the National Statistics Office released the Construction Material Wholesale Price Index (CMWPI) in the National Capital Region (NCR).

Compared to the previous year construction materials rose by 13.5% in June 2008. Prices for fuels and lubricants gained 41.5%, structural steel by 31.1%, reinforcing steel by 28.1% and hardware by 21.4%. 

Compared to the previous month construction materials rose by 4.7% in June 2008. Prices for Aluminium and other metall products climbed by 19.1%, structural steel by 14.3%, fuels and lubricants by 12.6% compared to May 2008.

Today the indonesian central bank Bank Indonesia realeased the consumer confidence index (CCI) for June 2008.

Consumer confidence index was reported at 79.1, down from 82.4 in May 2008. This is the lowest level since October 2005. In June 2007 the consumer confidence index was still at 95.8. Regionally consumers in DKI Jakarta (68.1), Denpasar (67.1) and Surabaya (63.3) were most pessimistic, while consumers in Makassar (110.2), Samarinda (97.3) and Pontianak were most optimistic in Indonesia.

This survey shows a gloomy future for Indonesia especially after new car sales rose by 39% and Toyota Astra, the market leader in Indonesia, sold 41% more cars in June 2008. Southeast Asia’s largest economy depends heavily on consumer spending. But after inflation reached double digit rates and the third straight key interest rate increase in three months consumers worry about their future.

Consumer Survey-Bank Indonesia (CS-BI) is a monthly survey that has been conducted since October 1999. By significance level of 99%, the sample has sampling error of 2%. Balance Score Method (net balance + 100) has been adopted to construct the index, whenever the index is above 100 points indicates an optimism (positive responses) and vice versa.

Today the National Statistics Office released the latest consumer price index (CPI) in Manila.

The year-on-year inflation jumped to 11.4% in June 2008 compared to 9.5% in May 2008. This is the highest inflation rate since May 1994 when inflation reached 11.5%. While the annual inflation rate rose to 9.2% in the National Capital Region (NCR), prices in Areas Outside the National Capital Region (AONCR) even accelerated by 12.3% in June 2008.

Excluding selected food and energy items, core inflation increased to 6.6% in June compared to 6.2% in May 2008. Prices for food, beverages and tobacco (FBT) rose by 16.5%, while services increased by 9.9% and fuel, light and water (FLW) increased by 7.6%

On June 5th, Bangko Sentral ng Pilipinas (BSP) raised its key interest rate by 25 basis points to curb inflation and to support the Philippine Peso, who lost more than 17% against the Euro and nearly 10% against the US Dollar.

On July 17th, the Philippine central bank, Bangko Sentral ng Pilipinas (BSP), will hold its next regular monetary policy meeting.

Today the Indonesian central bank, Bank Indonesia, increased again the key interest rate by 25 basis points to 8.75%. This was third rate increase after Bank Indonesia increased their rates to 8.25% in May 2008 and 8.50% in June 2008.

Bank Indonesia, headed by Governor Boediono wants to avoid second round price effects and hopes to keep inflation below 12.5% in 2008. On July 1st, the National Statistics Office reported that consumer prices rose by more than 11%, based on a new consumption pattern. Without this modification consumer prices would have risen by 12.8% in June 2008.

On August 5th, 2008 Bank Indonesia will hold its next regular monthly monetary policy meeting.

Today the National Statistics Office (Badan Pusat Statistik) reported that consumer prices rose at 11.03% in June 2008. In May 2008 the Indonesian Government increased fuel prices dramatically pushing consumer prices by 10.4%.

Dr. Rusman Heriawan, Director General of BPS presented the latest figures in Jakarta. Starting with June 2008, CPI will be based on a consumption pattern obtained from 2007 Cost of Living Survey in 66 cities (2007=100). Without this modification inflation would have been reported at 12.8% for June 2008.

Especially poor people were hurt by higher food and fuel prices. In Indonesia more than 15% of the population live on less than USD 20.- a month.

The increase in consumer prices make it more likely that Bank Indonesia will increase key interest rates at the next meeting on July 3rd, 2008 to fight inflation.

The International Monetary Fund (IMF) announced a new reduced GDP growth forecast for the Philippines. Now the IMF expects that the economy in the Philippines will grow by 5.2% in 2008, after they reduced their early forecast from 5.8%. Last week the IMF has finished its mission to the Philippines, which is confronted with higher inflation triggered by higher food and oil prices and a slowing global economy. Nevertheless the Philippine government still expects GDP to grow between 5.7% and 6.5%. Previous estimates even predicted up to 7% GDP growth.

In 2007 the economy grew by 7.2%, the highest rate in more than 30 years.

Today Domestic Trade and Consumer Affairs Minister Shahrir Abdul Samad informed the public that consumer prices rose by 3.8% in May 2008.

After the increase of fuel prices on June 5th, Malaysia’s central bank Governor Zeti Akhtar announced that Malaysia’s inflation rate may reach 5% in June 2008. For next month analysts expect electricty rates to rise. This will put additional pressure on Bank Negara Malaysia to increase interest rates to curb inflation. The next regular meeting of the central bank is scheduled for July 25th, 2008.