2.0-2.8% Sept inflation seen on cheaper food, oil
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THE WORLD | A11
45,000 DOCKWORKERS STRIKE ACROSS 36 US PORTS, RISKING SUPPLY CHAIN DISRUPTIONS
HEAPER food and oil as well as the appreciation of the peso may have contributed to cooler inflation in September, according to the Bangko Sentral ng Pilipinas (BSP). BSP said inflation may have averaged 2 to 2.8 percent in September due to lower food and oil prices as well as the appreciation of the peso. If this will be the case, this would be the first time the country’s inflation rate went below 3 percent since October 2020 when
inflation averaged 2.3 percent. In that year, inflation averaged 2.4 percent. “Negative base effects along with lower prices of food commodities including rice, meat, and vegetables as well as lower domestic oil prices, and the appreciation of the peso are the primary sources of downward price pressures for the month,” the BSP explained. “These are expected to offset the higher prices of fish and fruits and electricity rates.” Given this expectation by the
BSP and analysts here and abroad that inflation will continue to slow, Sumitomo Mitsui Banking Corporation (SMBC) Head of Asia Macro Strategy Jeff Ng said the central bank can be expected to continue cutting key policy rates. Ng said SMBC expects the BSP to cut rates by 50 to 75 basis points this year. Larger rate cuts in the order of 100 to 200 basis points are expected next year. For t he Monet a r y Boa rd ’s meet ing t h is mont h, Ng sa id t he BSP cou ld reduce rates by
25 basis points. T he next meeting of t he Monetar y Board was moved ea rl ier to October 16 instead of October 17. “BSP started its rate cut cycle on 15 August, cutting by 25 bps to 6.25 percent. BSP chief sees 2 more rate cuts in 2024,” Ng said in a macroeconomic brief. “BSP’s inflation forecasts for 2024-2026 are all below 4 percent, paving the way for more rate cuts in the upcoming meetings,” he added. See “Inflation,” A2
A broader look at today’s business www.businessmirror.com.ph
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Wednesday, October 2, 2024 Vol. 19 No. 351
P25.00 nationwide | 2 sections 22 pages | 7 DAYS A WEEK
‘SOLID’ IMPROVEMENT: PMI HITS 2-YEAR HIGH
RACE TO THE POLLS SENATORIAL aspirants and Partylist candidates submit their certificates of candidacy from various locations across the country for the 2025 Philippine midterm elections, set for May 12, 2025. Over 18,000 positions will be up for grabs, including 318 seats in the House of Representatives and 12 in the Senate. Stories on pages A3 and A14. NONIE REYES & NONOY LACZA By Cai U. Ordinario
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@caiordinario
ACTORIES nationwide increased their output in September 2024, posting the highest Purchasing Manager’s Index (PMI) level in two years, according to Standard & Poor’s (S&P) Global Market Intelligence.
In its latest report, the country’s PMI score reached 53.7 in September 2024 from only 51.2 in August 2024. S&P Global Market Intelligence said this is the “highest since mid-2022.” This, S&P Global Market Intelligence said, also indicated “a solid improvement” in the state and health of the Philippine manufacturing sector. “The Filipino manufacturing sector showed a significant improvement at the end of the third quarter, as indicated by the latest PMI data,” Maryam Baluch, Economist at S&P Global Market Intelligence, said. “Overall new orders increased at a much faster pace, despite demand for Filipino goods taking dropping notably in international markets. Consequently, manu-
facturers boosted production at a strong rate,” she added. Baluch noted that while there was still weak international demand and there are supply chain issues, strong domestic demand is driving and will drive manufacturing sector growth moving forward. She said this indicated improved confidence among manufacturers, especially since factories increased their hiring and purchasing activities, which was the highest since January 2023. “Price pressures also rose due to supplier charge increases and recent weather events affecting raw material costs. However, inflationary pressures remain historically subdued which supports the central bank’s recent decision to
FCDU LOANS POST Y-O-Y HIKES IN Q2, 1ST HALF, BSP REPORTS
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UTSTANDING loans granted by Foreign Cu r re nc y D e p o s it Units (FCDU) of banks posted year-on-year increases in the second quarter and first semester of 2024, the Bangko Sentral ng Pilipinas (BSP) reported. The data showed outstanding FCDU loans increased by 1.6 percent or $240.7 million to $15.63 billion in the first quarter 2024, compared to the $15.39 billion posted in the same period last year. In the January to June period this year, FCDU deposit liabilities reached $55.16 billion, which was 12.6 percent or $6.17 billion higher than the $48.99 billion posted in the same period last year. On a quarterly basis, the BSP data showed FCDU loans granted contracted 2.7 percent or $438.58 million compared to the $16.07 billion posted in the period ending March 2024. The data also showed FCDU deposit liabilities were lower by about $3.46 billion or by 5.9
percent from the end-March 2024 level of $58.61 billion. “The bulk of these deposits [$53.85 billion or 97.6 percent] continued to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves,” BSP said. BSP said that for the reference quarter, the maturity profile of the FCDU loan portfolio remained predominantly medium to long term or those payable over a term of more than one year. This comprised 76.7 percent of total, slightly lower than 79.1 percent from the previous quarter. FCDU loans granted to residents stood at $9.48 billion or 60.7 percent of total outstanding, of which majority went to the merchandise and service exporters at $2.49 billion or 26.2 percent; power generation companies, $2.12 billion or 22.4 percent; and towing, tanker, trucking, forwarding, personal and other industries,
NG end-Aug debt up ₧1T over ’23 level, hits ₧15.5T By Reine Juvierre S. Alberto @reine_alberto
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HE national government’s outstanding debt rose by a trillion year-on-year,
reaching P15.550 trillion as of the end of August 2024. Latest data from the Bureau of the Treasury (BTr) showed See “Debt,” A2
See “FCDU,” A2
See “PMI,” A2
PESO EXCHANGE RATES n US 56.0170 n JAPAN 0.3902 n UK 74.9339 n HK 7.2068 n CHINA 7.9898 n SINGAPORE 43.6304 n AUSTRALIA 38.7246 n EU 62.3861 n KOREA 0.0426 n SAUDI ARABIA 14.9327 Source:
BSP (1 October 2024)