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 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 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.
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 the National Statistics Office released the latest employment report based on the Labor Force Survey (LFS) April 2008. Regarding to the report the unemployment rate climbed to 8% in April 2008 compared to 7.6% in April 2007, while the employment rate dropped to 92% in April 2008 compared to 7.4% a year ago.
In April 2008 the number of unemployed persons was reported at 2.9 million. The total employed population was registered at 33.5 million. While 49.6% of the employed were in the services sector, 35.5% were in the agriculture sector and 14.9% in the industry sector.
Since the beginning of 2008 most of the Asian governments had to cut their fuel subsidies because skyrocketing crude oil prices threatened their budget balance. As a result inflation rates increased to their highest level in may 2008. The central banks of India, Indonesia and the Philippines already raised their key interest rates this June and Malaysia and Thailand are expected to follow at their next central bank meetings.
At the moment the GDP is still growing at a respectable level but recent data already shows a remarkable decline in consumer confidence. With high inflation and further possible rate increases investors will have to find better places to invest their money than in the stock market.
| country |
GDP growth (YoY) |
inflation (may 08) |
key interest rate |
local currency vs EURa) |
| India |
8.8% |
7.9% |
8.00%1) |
-14.1% |
| Indonesia |
6.3% |
10.4% |
8.50%2) |
-4.1% |
| Malaysia |
7.1% |
3.8% |
3.50%3) |
-3.8% |
| Philippines |
5.2% |
9.6% |
5.25%4) |
-13.0% |
| Thailand |
6.0% |
7.6% |
3.25%5) |
-17.4% |
a) since 31.12.2007
1) On June 5th, 2008 Bank Indonesia raised its key interest rate by 25 basis points to 8.5%.
2) On June 4th, 2008 the Reserve Bank of India raised its key interest rate by 25 basis points to 8%.
3) On May 26th 2008 Bank Negara Malaysia kept its key interest rate unchanged (no change since April 2006)
4) On June 5th, 2008 Bangko Sentral ng Pilipinas raised its key interest rate by 25 basis points to 5.25%.
5) On May 21st, 2008 Bank of Thailand kept its interest rate unchanged (no change since August 2007)
Today Bangko Sentral ng Pilipinas (BSP) released their latest Consumer Expectations Survey (CES). The overall consumer confidence index (CI) is determined by the average of the 3 measures, namely, outlook on
macroeconomic condition, family financial situation and family income.
The overall consumer confidence index (CI), fell by 11.7 index points to -43.8% (quarter-on-quarter) and by
17.8 index points (year-on-year). The main reason for the drop in consumer confidences was higher fuel and food prices and the fear of lower income.
Nevertheless 21.1% considered buying a house and/or lot a timely investment for Q2 2008 because of lower interest rates on home loans and the expectations of further appreciation of real estate properties. The highest buying intentation was recorded for consumer durables at a rate of 10.6% followed by house and/or lot at 8%. Only 5.3% of the particants of the survey intends to buy a motor vehicle in the next 12 months.
On June 21st and 22nd, 2008 the SMART Investment & International Property Expo will take place at the Hong Kong Convention & Exhibition Centre, Hongkong. It is one of the biggest and longest established expo of its kind and showcases attractive investment opportunities from the real estate and financial sectors.
Private investors may focus on the following presentations:
Phuket - Post Election Opportunities: What investors should look for in a property related investment
Graham Bibby, Chairman Richmond Group
The Philippines - the hottest market in South-East Asia
Rick Santos, Managing Director CB Richard Ellis
Updates legal matters for property investment in Thailand (Top 10 Tips)
Desmond Hughes, Partner Belmont Limcharoen
Malaysia My Second Home (MM2H)
Lorraine Kijvanit, Country Manager Promotevest (MM2H) Sdn Bhd
Prospects of investing in the luxury condominium market in Malaysia
Chee Meng Tang, CEO Henry Butcher Marketing Sdn Bhd
China Property Market Overview 2008
Sherman Lai, Deputy Chairman Centaline
You can get a free pass to the expo and seminars.
Today the National Statistics Office released the consumer price index for May 2008.
The year-on-year headline inflation rate at the national level further jumped to 9.6% in May from 8.3% in April 2008. This marks the highest inflation since January 1999 when inflation rate was at 10.5%.
The food, beverages and tobacco (FBT) index was up by 13.7% in May 2008 compared to 11.4% in April 2008 while the fuel, light and water (FLW) was up by 8.2% compared to 8.0% in the previous month, contributing most the overall inflation rate.
In May 2007 inflation was only 2.4%. The Philippines as a net importer of rice and oil are highly effected by the skyrocketing prices of these commodities and today Bangko Sentral ng Pilipinas decided to increase the key interest rate by 25 basis points to 5.25% to fight a further increase in inflation rates.
