Benchmark rate cut again, in line with our expectations.
A new Digital Taxation Act brings foreign providers into line with domestic on VAT.
GDP growth forecasts affected by weakening domestic demand, and dampening sentiment.
Defying market expectations, but concurring with our predictions, the BSP cut the benchmark rate again on 9th October. The Asian Development Bank’s overly optimistic predictions have been hampered by exactly the factor they pointed to as providing a boost – public infrastructure projects, rather than turbocharging the economy, have instead dampened sentiment due to ongoing concerns over corruption.
Inflation & Interest Rates
After hitting 1.5% in August inflation rose in September to 1.7%, the highest again since March, but still beneath the Bangko Sentral ng Pilipinas’ (BSP) target band of 2-4%. Accordingly, on 9th October the BSP cut the key reverse repurchase rate (RRP) by 25bp to 4.75% - now the fourth consecutive cut since July. The move defied market ex...
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