Philippine Economy Talk

[chronicle]

the days of low interest rates for PH are over despite the investment grade rating

US bond yields are rising

investors will be demanding higher interest rates from PH going forward

Ouch. Not good. Kelangan tapusin kaagad ang loan.

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[Wh1stl3r]

It was a good run.

[c_cube]

Will the increase in rate make the PHP appreciate?

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[uls]

Ouch. Not good. Kelangan tapusin kaagad ang loan.

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actually i was referring to PH govt bonds

bond investors will be demanding higher interest from the govt to compensate for higher inflation

that's why bond prices in the secondary market are falling now

coz everyone expects new bonds will have higher interest than old bonds

--

PH dollar denominated bonds for foreign investors ---

foreign investors will be demanding higher interest from PH coz benchmark US yields are rising

naturally as US yields rise, so will yields of other sovereigns

and foreign bond investors will look at our capacity to pay

they'll look at our dollar inflow & outflow and they'll see we're currently spending more dollars than we're earning so we're kinda risky so they'll demand higher interest

--

re BSP interest rate hike

they are being pressured to do something coz of rising infaltion

i understand BSP needs more data before they move

a lot of people are expecting they'll move on May 10

[uls]

Will the increase in rate make the PHP appreciate?

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yes

actually PHP is doing quite well these couple of days even as the dollar strengthens

to me that looks like the market is already expecting a rate hike

[uls]

[Monseratto]

Pesos closes at nearly 52 to the dollar today... Hmmmm

USD / PHP
52.0400

Data as of06:08 EDT

Day High
52.3390
Day Low
52.0300

[uls]

Pesos closes at nearly 52 to the dollar today... Hmmmm

USD / PHP
52.0400

Data as of06:08 EDT

Day High
52.3390
Day Low
52.0300

PHP is holding up well coz market is expecting BSP rate hike

[jut703]

Here's to hoping the inflation is temporary, brought about by the adjustment of the economy to the tax reform. Since the adjustment next year will only be for fuel taxes (no more sugar and coal), hopefull inflation drops back to acceptable levels.

After all, domestic consumption and OFW/BPO remittances have not yet dropped so fundamentally we're still okay. We really just have to weather this economic storm brought about by TRAIN.

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[dreamur]

Here's to hoping the inflation is temporary, brought about by the adjustment of the economy to the tax reform. Since the adjustment next year will only be for fuel taxes (no more sugar and coal), hopefull inflation drops back to acceptable levels.

After all, domestic consumption and OFW/BPO remittances have not yet dropped so fundamentally we're still okay. We really just have to weather this economic storm brought about by TRAIN.

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There is still the threat of removing the PEZA incentive (5% GIT) and replace with 15% regular corporate income tax under TRAIN2. Simulations showed an average of 50% to 250% additional cash outflow. Most expansions are on hold or diverted to Vietnam, Malaysia or India. Dollars are being sent back to HQ, thanks to Trump's tax reforms.

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