01:00.0
And later, a discussion on the Philippine economy and sustainable financing with economists Nicolas Mapa and Yuben Paracuelles.
01:10.6
We begin with the U.S. Federal Reserve, leaving interest rates unchanged at a two-decade high as expected.
01:17.9
Officials unanimously decided on Wednesday to leave the key rate at 5.25 to 5.5 percent, where it has been since July.
01:27.3
Fed Chair Jerome Powell admits the process...
01:30.0
The process of getting inflation sustainably down to its 2 percent target has a long way to go.
01:36.6
According to the Fed's preferred inflation gauge, the core personal consumption expenditures increased to 2.7 percent in March from a year earlier.
01:45.9
Despite this, the Fed Chair allays concerns the sticky inflation would push the central bank to do another rate hike.
01:53.9
I think it's unlikely that the next policy rate move will be a hike. I'd say it's unlikely.
02:00.0
You know, our policy focus is really what I just mentioned, which is how long to keep policy restrictive.
02:08.3
You ask, what would it take?
02:09.9
You know, I think we'd need to see persuasive evidence that our policy stance is not sufficiently restrictive to bring inflation sustainably down to 2 percent over time.
02:17.8
That's not what we think we're seeing, as I mentioned.
02:20.8
But the economy has made considerable progress toward our dual mandate objectives.
02:25.6
Inflation has eased substantially over the past year, while the labor market has remained stable.
02:30.3
And that's very good news.
02:33.3
But inflation is still too high.
02:36.2
Further progress in bringing it down is not assured, and the path forward is uncertain.
02:42.0
We are fully committed to returning inflation to our 2 percent goal.
02:48.0
Also on Wednesday, the Fed announced it will shrink its balance sheet at a slower pace, a step meant to ease potential strain on money market rates.
02:58.9
Starting in June, the Fed announced it will shrink its balance sheet at a slower pace, a step meant to ease potential strain on money market rates.
03:00.3
And that's true for the Fed.
03:00.3
The Fed will lower the monthly cap on how much treasuries it will allow to mature without being reinvested to $25 billion from $60 billion.
03:10.8
This while keeping the cap for mortgage-backed securities unchanged at $35 billion.
03:18.5
I look now at the financial markets in the U.S.
03:21.2
They traded sideways Wednesday following the Fed's warier outlook.
03:25.2
The S&P 500 and the NASDAQ ended lower, dragged down by losses.
03:30.0
from chip makers.
03:31.7
The Dow, meanwhile,
03:32.6
notched a modest gain
03:33.9
as Fed Chair Jerome Powell's statement
03:35.6
eased worries it was losing control
03:37.8
of sticky inflation.
03:40.1
Investors also reacted positively
03:41.8
to the Fed saying
03:42.9
it would tap the brakes
03:45.7
tightens conditions
03:46.8
for financial markets.
03:50.1
There are two groups of people.
03:53.3
Those who don't know
03:54.6
where interest rates are going
03:55.8
and those who don't know
03:58.1
that they don't know
03:59.1
where interest rates are going.
04:01.2
And even Jay Powell
04:02.6
is in the first group.
04:05.4
where interest rates are going.
04:07.2
You ask him, he says,
04:08.6
I'm data dependent.
04:15.2
he was telegraphing
04:17.9
and lo and behold,
04:20.2
the economy's strong.
04:22.8
Unemployment down.
04:25.0
Labor market looks great.
04:28.8
it was a little weak,
04:31.6
A lot of strong numbers out there.
04:34.2
So the bottom line is
04:38.9
we've made a lot of progress
04:41.3
We came down from 9.1.
04:42.9
We're in the threes.
04:50.4
the 10-year treasury yield
04:51.9
briefly dropped below 4.6%,
04:54.7
alleviating some investors' fears.
04:56.5
It may jump back above 5% this year,
04:58.8
and restrict the economy.
05:01.1
But stocks tied to
05:02.0
artificial intelligence
05:03.0
struggled during Wednesday's session
05:04.6
following disappointing reports
05:06.6
from some top AI contenders.
05:09.4
First quarter reporting season
05:10.7
has breezed past the halfway point
05:12.7
with 310 of the companies
05:14.9
in the S&P 500 index
05:18.8
Taking a look at futures
05:21.1
they are pointing to a higher open.
05:26.5
equities are heading lower
05:28.6
as traders digest
05:30.6
Fed's rate decision
05:32.0
and key data in the region.
05:33.6
Australian shares are up
05:35.1
a tenth of a percent,
05:36.6
while Japan's Nikkei 225
05:38.1
is down four-tenths of a percent.
05:40.4
South Korea's Kospi
05:41.6
is also down three-tenths of a percent.
05:44.5
Seoul's inflation rate
05:45.5
slowed more than expected last month,
05:49.3
from March's 3.1.
05:51.7
The indication of cooling inflation
05:53.3
may put the central bank
05:54.6
on the path toward
05:58.5
a key rate steady
06:00.1
at 3.5% last month.
06:03.1
Investors will also turn
06:04.7
their focus on the Japanese yen
06:06.4
which had a volatile
06:07.6
start of the week.
06:09.4
The Japanese currency
06:10.4
resumed its weakness
06:11.4
against the greenback
06:12.4
on Thursday's trading
06:13.5
after a sudden surge
06:16.5
sent the currency
06:17.7
more than 3% higher
06:19.4
against the U.S. dollar.
06:21.2
This follows suspicions
06:22.3
of government intervention
06:23.4
to prop up the currency.
06:28.5
the International Monetary Fund
06:30.4
says central banks in Asia
06:31.8
are in a good position
06:33.1
to move independently
06:34.7
from the U.S. Federal Reserve.
06:37.4
According to the financial agency,
06:39.3
relatively low inflation
06:41.3
will allow monetary authorities
06:44.2
on domestic conditions.
06:46.4
The IMF in its latest outlook
06:48.0
raised its growth forecast
06:49.6
for Asia this year
06:52.8
It cited dissipating
06:54.5
inflationary pressures
06:55.8
and strong private consumption
06:57.6
for its projects.
07:03.8
at the local corporate headlines
07:05.4
we're watching this morning.
07:06.8
Philippine National Bank
07:07.9
firing off earnings disclosures
07:11.5
Its core net income
07:13.9
to 12.8 billion pesos
07:15.7
in the first quarter.
07:17.1
The Lusio Tan Group's
07:19.0
also continued to enjoy
07:20.3
higher net interest income
07:21.9
amid elevated borrowing rates.
07:24.6
Total assets, meanwhile,
07:25.8
was slightly down
07:26.6
to 1.19 billion pesos.
07:28.5
From the 1.21 billion
07:30.7
from the end of 2023.
07:33.5
And budget carrier AirAsia
07:35.8
banking on travelers' adventurism
07:38.2
with its newest product offering.
07:40.9
The airline group
07:42.4
a subscription product
07:43.7
with zero base fares
07:45.8
within the ASEAN region.
07:48.2
Now, AirAsia says
07:49.3
the ASEAN Explorer Pass
07:51.0
will seek to encourage people
07:52.7
to explore more destinations
07:54.1
in Southeast Asia.
07:59.9
The airline's also offering
08:03.6
Travelers here in the Philippines
08:05.3
can avail of that
08:12.6
The Philippines remains
08:13.9
one of the world's
08:14.6
most vulnerable countries
08:15.9
to climate change
08:17.1
and to mitigate its effects,
08:18.8
the government has committed
08:24.4
scaling up efforts
08:25.4
towards low-carbon
08:26.9
and climate-resilient initiatives.
08:30.1
ambitious targets,
08:31.6
how can the public
08:32.2
and the private sector
08:33.8
to achieve sustainable financing
08:35.9
while reducing instances
08:39.6
For more on this,
08:40.7
we are now joined
08:42.2
He's a senior economist
08:45.7
Welcome to our program.
08:47.6
Good morning, Stanley.
08:48.7
Thanks for having me.
08:51.0
sustainable financing first.
08:52.4
It is said to have experienced
08:54.2
during the pandemic.
08:55.9
Is it in full throttle now?
08:57.4
And what is the global
09:00.9
sustainability-linked financing?
09:05.2
we've seen a lot of
09:07.0
progress on that front,
09:09.3
especially support
09:13.3
issuing that circular
09:15.4
really laying down
09:18.2
for sustainable financing
09:21.2
that type of support,
09:25.1
or at least now have
09:25.8
the space and scope
09:29.5
sustainable financing
09:32.4
I think more and more
09:39.1
on the environment.
09:44.6
everyone probably
09:45.6
is thinking about
09:46.8
how do we move forward?
09:51.1
with all this change
09:53.6
we're going to need
09:55.0
sustainable finance
09:56.2
to drive that through.
09:58.9
one of the challenges
09:59.7
in increasing the volume
10:02.1
in green and sustainable
10:04.7
fighting greenwashing,
10:07.0
of misrepresentation
10:08.4
riding on increasing
10:09.9
and the adaptation
10:12.5
by many businesses
10:15.0
what are the global
10:15.9
entities doing about this
10:17.3
as far as scrutiny,
10:20.4
and even regulation
10:22.3
those seeking green financing
10:29.4
as well as the regulators
10:31.1
have to work hand in hand.
10:33.7
has been laid out
10:37.0
we'll have to sort of scrutinize
10:38.2
and make sure that people
10:39.0
aren't just jumping
10:40.0
on this bandwagon
10:41.9
this type of financing
10:43.0
and the benefits,
10:44.0
at least the benefits
10:45.0
that are afforded
10:46.3
to green financing
10:50.9
towards sustainability
10:52.2
and the environment.
10:57.9
both the private sector
10:59.0
and the authorities,
11:00.8
especially all the BSP
11:03.5
that that does not happen.
11:07.0
geopolitical challenges
11:10.1
as very impactful
11:12.0
in terms of growth
11:13.2
for green finance
11:16.2
positive or negative,
11:17.9
would these global challenges
11:19.3
affect the growth
11:20.2
of green finance?
11:37.0
I guess some people
11:41.8
things that are more available
11:45.5
you have some countries
11:46.3
that are more reliant
11:47.9
given the abundance
11:48.9
in their country.
11:51.8
the shift has to happen
11:54.7
the green financing
11:55.8
and the frameworks
11:56.4
that the BSP has laid out,
11:57.9
I will make that easier.
12:00.1
we just have to keep on
12:02.1
in the right direction.
12:04.7
smack in the middle
12:06.9
is the Philippines.
12:07.9
Our infrastructure push,
12:09.3
particularly in renewable energy,
12:13.9
and sustainability financing,
12:16.1
plays a very crucial role
12:17.9
in meeting these objectives.
12:19.5
what is the situation
12:20.3
in the Philippines right now
12:22.1
of those that offer financing
12:24.1
for these ESG projects?
12:27.7
we do have the framework out
12:29.0
and there are several banks
12:30.0
I think who are eager
12:30.8
to go this route.
12:34.0
I think the framework is there
12:35.3
and I think that's
12:35.7
the most important thing
12:36.6
is the BSP getting
12:37.6
the framework set up
12:39.3
so that people can make use
12:44.1
because we do have to
12:46.0
and with the government
12:46.9
aggressively pushing
12:55.5
the financing will be there
12:56.9
into the framework.
12:57.7
The framework has been set up
13:01.7
so hopefully we can
13:02.6
really pursue this avenue.
13:05.5
the government plays
13:06.3
a very important role here,
13:09.5
or even what quality
13:11.5
do you wish to see
13:12.3
in the Philippines'
13:14.6
and what can the government
13:19.4
push these initiatives further?
13:24.0
I always think it's dialogue.
13:25.8
given the fact that
13:26.7
this won't be a hard
13:27.6
partnership between
13:28.2
the private sector
13:29.6
and the regulators,
13:32.4
it's good to have
13:39.9
getting both the regulators
13:42.5
with potential players
13:43.8
so that we can iron out,
13:48.5
fine-tune the framework
13:57.6
And then hopefully
13:58.2
we can push this forward.
14:00.3
When you talk about
14:05.3
in advanced economies
14:09.3
But Asia-Pacific,
14:10.7
remains a bright spot
14:12.8
especially for those countries
14:15.8
to cleaner energy
14:16.7
like the Philippines
14:18.2
sustainable sources.
14:20.7
What kind of growth
14:24.8
and ESG financing?
14:30.9
no limit to that.
14:33.8
it really just depends
14:36.1
the political will
14:45.2
the corporations.
14:56.7
in the past years
15:00.2
setting up that framework
15:03.1
everything starts.
15:06.5
with the European Chamber
15:08.1
of the Philippines
15:10.9
Finance Dialogue.
15:19.4
particularly involved
15:32.5
these discussions
15:40.5
find out what works
15:41.9
what doesn't work.
15:46.5
Thank you so much
15:47.0
for the insights.
15:51.9
Foreign investors
15:53.7
from the Philippines
15:55.6
Foreign portfolio
16:00.7
This is a 9% drop
16:05.0
It is also a reversal
16:11.2
The Philippine Central Bank
16:14.4
were in securities
16:15.9
listed at the stock market,
16:17.5
particularly in banks,
16:22.6
government securities.
16:35.1
of Filipino families
16:36.4
experiencing hunger
16:41.9
Based on the latest
16:43.5
social weather stations,
16:45.6
of hungry families
16:48.5
in the first quarter
16:52.1
recorded last December.
17:01.2
The latest figure
17:03.5
nearly 4 million families
17:05.2
who had nothing to eat
17:07.9
money or food access.
17:11.5
the highest hunger rate
17:13.5
particularly in Metro Manila.
17:15.7
Involuntary hunger
17:20.3
which was conducted
17:21.2
from March 21 to 25
17:24.1
face-to-face interviews
17:30.8
The Fisheries Bureau
17:35.1
in the Philippines.
17:39.0
two areas in Mindanao
17:40.2
and four in the Visayas
17:58.1
from these places
18:00.4
so long as they are fresh
18:01.9
and washed thoroughly.
18:09.9
for the recent spike
18:11.0
in reports of power outages
18:12.4
in its service area.
18:14.3
The power distributor
18:18.6
of power interruption
18:22.3
But this increased
18:30.6
these were incidents
18:32.5
caused by an increase
18:33.9
in electricity demand
18:35.5
due to the extreme heat.
18:39.9
to be more resilient
18:41.1
against demand-driven outages.
18:45.3
Meralko's got to take a look
18:46.6
at this distribution network,
18:49.0
And start building
18:52.8
that we're seeing now
18:54.2
because if it happens
18:57.9
questioning the media
18:58.8
by the government
18:59.8
what are you doing
19:00.8
to make your network
19:10.0
hit by a grass fire
19:12.0
after the heat index
19:14.0
reached 41 degrees Celsius.
19:16.4
The blaze started
19:17.1
at 7 in the evening
19:18.4
and was only put out
19:19.4
three hours after.
19:21.1
Authorities have yet
19:22.7
the value of the damage
19:24.1
caused by the fire.
19:25.2
No one was reported hurt
19:27.0
and an investigation
19:28.2
into the incident
19:29.4
is already underway.
19:32.9
Philippine Transport
19:36.7
PUV modernization scheme
19:38.5
despite more protest
19:41.8
Andrea Taguinas reports.
19:57.9
for the consolidation
19:58.7
of traditional jeepneys
20:01.3
but the fight continues
20:02.6
for transport groups
20:03.8
Piston and Manibela
20:05.0
who refused to surrender
20:11.0
modernization program.
20:12.7
They marched with workers
20:13.9
and other progressive groups
20:21.9
from reaching Mindyola
20:23.0
a historic protest site
20:27.1
members of Piston
20:28.0
say they will keep
20:30.4
to ply their routes
20:32.0
and months to come
20:33.8
through consolidation.
20:43.1
So it's only right
20:52.4
and other sectors
20:54.6
will not be stranded
20:55.9
in their own way.
20:58.1
The Transportation Department
21:00.8
apprehensions are inevitable.
21:03.1
After about two weeks
21:06.3
and then it was evaluated
21:07.6
and the letters were given
21:09.2
and the explanation was evaluated
21:11.6
and then there will be
21:18.4
even though they didn't
21:20.1
that's where they will
21:26.6
Manibela meanwhile
21:27.6
announced another
21:29.6
starting Thursday
21:30.5
in the hopes that
21:31.6
President Ferdinand
21:33.5
will still heed their call
21:34.7
to halt the implementation
21:44.9
repaired by the President
21:46.9
we will not give up
21:52.3
modernization program
21:53.4
and the transportation
21:54.5
department asserts
21:55.8
the scheme will push through
21:57.3
even without them.
21:59.1
What the DOTR is learning
22:11.2
the other components
22:15.5
people are waiting
22:17.5
the second component
22:20.7
route rationalization
22:31.6
Based on the latest
22:40.1
the consolidation rate
22:41.9
public utility vehicles
22:45.8
LTFRB Chairperson
22:49.5
than the government's
22:54.4
fear for their future
22:55.4
even if they have
22:57.3
with the consolidation
22:58.7
like Elisa Malubay
23:00.2
who happened to join
23:08.9
on their children
23:16.1
Transport Workers
23:17.7
government should
23:19.3
jeepney operators
23:20.3
after forcing them
23:21.5
to form a cooperative
23:24.4
providing trainings
23:25.3
like fleet management
23:26.5
and internal conflict
23:28.3
to ensure their success.
23:38.1
temporarily closed
23:39.1
for retrofitting work
23:43.2
of the EDSA carousel
23:53.5
around six months
23:56.7
Development Authority
23:57.7
advises motorists
23:58.9
to take alternate
23:59.9
routes and utilize
24:01.1
the Mabuhay lanes
24:03.5
screens right now.
24:24.4
Now here's a quick look
24:29.1
at the other stories
24:30.1
we're tracking today.
24:31.2
At 10 in the morning,
24:32.3
the Energy Regulatory Commission
24:33.7
will discuss its decision
24:37.0
electricity spot market
24:38.7
in Luzon and Visayas
24:40.0
during red alerts.
24:42.6
And still at 10 in the morning,
24:44.4
the Social Welfare Department
24:46.0
will tackle its response
24:47.9
to the worsening effects
24:52.3
the Philippines and Canada
24:53.2
will ink a partnership
24:54.2
on nature-based solutions
24:55.9
for climate adaptation.
24:58.8
And as we reported,
24:60.0
we will monitor today
25:01.6
of the transport strike
25:04.4
modernization program.
25:08.5
We're taking a short break
25:10.9
the PSEI is back online
25:12.7
following a Labor Day
25:14.5
We assess the opening numbers
25:16.7
of Trading Edge Consultancy.
25:19.3
will be right back.
25:24.2
You're still watching
25:45.7
was closed on Wednesday
25:46.9
to the Labor Day holiday.
25:49.1
Now, ahead of the release
25:50.3
of the opening numbers
25:51.2
and following the Fed's
25:53.1
what should we expect
25:55.6
of Philippine markets?
25:58.7
the Chief Investment Strategist
26:00.3
of Trading Edge Consultancy.
26:02.6
Good morning, Ron.
26:04.0
Good morning, Stanley.
26:05.1
Thank you for having me.
26:06.3
It's good to have you here.
26:08.2
just held its ground
26:09.6
on interest rates
26:13.7
to fight sticky inflation.
26:16.8
I'd like to bring out here
26:20.4
in bringing rates down
26:22.6
and the path forward
26:24.1
is still uncertain.
26:27.1
no further rate hike
26:29.9
what is this worth
26:35.4
as you've mentioned,
26:36.4
the latest catalyst
26:37.9
keeping its interest rate
26:39.7
at a target range
26:43.7
as widely expected.
26:47.2
more importantly,
26:48.8
longer than expected
26:57.8
the previous months
26:59.6
to be comfortable
27:01.4
will indeed start
27:07.2
This is in contrary
27:10.6
to earlier this year,
27:19.7
with the first cut
27:23.0
as early as March.
27:24.6
March has come and go
27:26.0
and we haven't seen
27:29.5
And that's because
27:31.7
uptick in U.S. inflation
27:33.2
in the last two months
27:36.4
headline inflation
27:40.6
from a low of 3.1%.
27:45.6
and you've mentioned
27:57.9
from June to September
27:59.5
and most recently
28:09.2
happening next year.
28:12.9
So, the best case now
28:15.3
a cut will happen
28:17.4
and will move back
28:21.1
which essentially
28:22.6
that the three cuts
28:27.0
in its last meeting
28:46.4
a consolidation phase
28:47.8
with participants
28:53.5
whether inflation
28:54.4
through that time
28:59.2
then the expectations
29:05.1
Now, having said that,
29:06.7
I'm already wondering
29:09.4
dramatic repricing
29:11.8
with these investors
29:21.0
that affect markets
29:31.4
of equity markets.
29:34.3
higher interest rates
29:35.4
make borrowing costs
29:40.0
It will be more expensive
29:46.1
why, for example,
29:47.1
the property sector
29:56.7
with other sectors.
30:04.8
that's going to put
30:05.4
a lot of pressure
30:06.4
in terms of value,
30:08.4
in terms of valuations
30:11.5
the Philippine market
30:12.1
may just be reacting
30:13.4
to that right now,
30:14.3
just bringing the opening numbers.
30:18.5
That's at least two minutes
30:19.5
after opening of trade.
30:23.3
down for the Philippine markets.
30:25.8
Maybe a lot of investors
30:30.4
the tone has been set
30:32.0
for the interest rate cutting.
30:35.5
is always expected
30:36.3
to keep pace, Ron,
30:37.4
with US Fed action.
30:39.4
But the International Monetary Fund
30:41.2
this need not be the case
30:43.3
for the Philippines
30:44.2
or other Asian economies,
30:45.8
citing central banks in Asia,
30:47.6
may be independent
30:48.5
in terms of deciding
30:51.9
it has to be the case
30:53.1
because if you recall
30:55.2
where the US dollar
30:58.1
to peso exchange rate
30:59.7
shot to as high as
31:02.9
and the major cause of that
31:05.1
was the divergence of policies
31:07.7
and the Philippines.
31:09.5
The Fed at that time
31:10.5
was still raising rates.
31:12.5
On the other hand,
31:13.6
the BSP decided to push
31:15.2
and even establish
31:18.5
a more dovish stance.
31:20.6
So, and the result,
31:24.0
the peso depreciated sharply
31:26.8
in a short span of time.
31:29.0
Obviously, a depreciation
31:30.8
is also inflationary.
31:32.4
So, we don't want that to happen.
31:35.0
So, with inflation,
31:37.4
and in the Philippines,
31:38.6
still remaining high.
31:43.7
the BSP has to keep pace.
31:46.7
will maintain its rate
31:50.2
like the Philippines,
31:54.3
in order to preserve
31:56.1
the stability of the peso
32:03.0
less inflationary pressures
32:09.1
Especially given that the peso
32:10.3
has been performing badly recently.
32:13.2
Now, to the opening month of May today
32:20.9
much improved closing
32:22.2
in the 6,700 level
32:24.8
for Philippine stocks.
32:26.9
First, how do you think
32:30.1
to other domestic indicators
32:32.4
that would either prop
32:33.6
or weigh down trading today?
32:35.9
Well, last month,
32:38.6
the PSEI slid to a low
32:45.5
and ending the month of April
32:50.2
And there's no particular reason
32:52.7
why the index rallied
32:56.4
except that its sell-down
32:58.0
was a little bit oversold
33:02.2
the PSEI prior to that slide
33:04.1
was still trading
33:05.3
between 6,900 and 7,000 level
33:07.3
before it slipped
33:08.4
to a low of 6,400.
33:10.0
So, it's just a technical rebound.
33:13.4
So, moving forward
33:14.3
with the indication
33:17.8
that the Fed will stay
33:21.3
five to six months,
33:23.1
then I think investors
33:25.3
will not really be aggressive
33:27.8
in positioning in the market
33:31.8
Ron, a lot of economists
33:34.5
are saying the 6,400 level
33:36.9
seems to be a strong support
33:40.5
which means to say
33:43.3
has already happened
33:44.5
and we're, in a way,
33:46.7
on our way up now.
33:47.7
Now, charts-wise though,
33:53.8
as we climb up again?
33:56.1
Well, from 6,400,
33:57.6
it rallied to 6,700.
34:00.8
the interim resistance
34:02.6
now that the index is facing
34:04.2
is its previous support
34:11.3
Given its rally from 6,400,
34:13.1
I think it will need
34:14.7
to rebase once again
34:16.0
and move sideways
34:17.1
before it can take out
34:19.9
and then take out
34:20.2
its 7,000 resistance.
34:22.9
a little bit more
34:29.2
And, like you said,
34:30.4
because of the no catalyst
34:32.6
spanning from the US,
34:35.2
then we'll likely see
34:37.3
indeed that the markets
34:39.7
will just move sideways.
34:41.7
the index actually needs
34:43.4
for it to move sideways
34:45.3
to consolidate again.
34:50.2
a more sustainable rally
34:51.7
if ever later on.
34:54.8
One of our top stories today,
34:56.5
March net foreign outflows
34:58.0
of $236 million in March.
35:01.5
More than half of this
35:02.8
coming from securities investments
35:05.8
What trend are you seeing now
35:07.0
for hot money now?
35:08.3
Well, that's to be expected,
35:10.1
especially, again,
35:11.4
with inflation picking up
35:13.3
in February and in March.
35:15.7
Higher than expected
35:18.9
and both in the US.
35:23.3
are very sensitive
35:24.1
to interest rates
35:26.2
and inflation rates.
35:27.9
So, with inflation,
35:33.0
with risk to inflation
35:36.8
especially with global prices
35:38.9
of crude persistently going up
35:41.4
because of the conflict
35:42.9
in the Middle East,
35:44.3
then perhaps we will see
35:47.4
in the few months,
35:49.9
in the few months.
35:50.2
And, unfortunately,
35:52.2
that may put some pressure
35:54.7
on risk assets in general.
35:58.2
I'd like to talk now
35:59.0
about a more optimistic topic,
36:01.7
consensus 12-month target
36:03.2
for the Philippine Stock Exchange
36:04.8
because the last time we spoke,
36:06.5
it was at 8,338 thereabouts.
36:09.8
Yeah, it's still there.
36:11.1
It's still there.
36:11.7
So, you're not recalculating
36:13.4
from the March outlook?
36:15.5
From the recent update
36:18.5
from the April figures,
36:21.7
it's a bit downgraded
36:22.6
to around 8,250 and the like.
36:24.6
So, it's still more or less there.
36:25.5
It's still above 8,000, huh?
36:27.0
Yeah, from a fundamental perspective.
36:32.9
Although, it may be again
36:35.3
be revised perhaps downwards
36:40.9
remaining at this high.
36:44.5
When you talk about 12-month targets
36:45.8
from April to April next year,
36:47.4
the cuts might happen by then.
36:53.0
trading guidance for May,
36:54.8
sell in May and go away.
36:55.8
Is that happening now?
36:57.2
Do you expect it?
36:57.8
Well, from a trading perspective,
37:01.2
if that's the case,
37:03.3
if we're expecting prices to go down,
37:05.8
so that's not really good
37:07.3
from a short-term trading perspective.
37:09.7
But if your time frame is late,
37:11.4
let's say more than three months,
37:12.9
more than six months,
37:14.6
or even a year down the road,
37:16.8
then any weakness,
37:17.9
especially if you're expecting
37:19.2
cuts to happen late in the year
37:21.8
or even next year,
37:23.8
then any pullbacks
37:25.6
or any weakness in the market
37:27.8
may actually be taken
37:28.8
as a window to pick up
37:32.3
or names that will benefit
37:33.9
immediately once rates
37:38.0
finally get cut later on.
37:43.5
we wish you a profitable new month,
37:45.7
Ron Acoba of Trading Edge.
37:47.0
Talk to you again sometime soon.
37:49.2
Thank you, Stanley.
37:51.5
Time to zip through the top headlines
37:53.1
from major business papers
37:54.4
from Business World.
37:55.3
The Philippines will kick off next week
37:57.5
the first round of talks
37:59.2
with the United Arab Emirates.
38:00.6
This is for a comprehensive
38:02.3
economic partnership agreement.
38:04.6
A trade official says
38:05.7
the negotiations are eyed
38:07.2
for completion, in fact,
38:09.7
by the end of the year.
38:11.3
It would cover market access,
38:13.0
intellectual property,
38:14.1
and digital trade, among others.
38:18.1
From business media,
38:19.2
Mirror, the Migrant Workers Department
38:21.1
notes a slowdown in the deployment
38:23.3
of Filipino seafarers abroad
38:25.9
after a strong rebound in 2023.
38:29.8
And from the Philippine Daily Inquirer,
38:32.3
Securities and Exchange Commission
38:33.7
stands by its decision
38:34.9
to hike regulatory fees
38:36.6
despite opposition
38:38.1
from some business groups.
38:40.2
We're taking a quick break now.
38:42.4
Yuben Paracueles,
38:43.9
Nomura Senior Economist,
38:45.1
will give us his insight
38:46.1
on the Philippine economy this year.
38:48.1
Market Edge will be right now.
38:49.2
We'll be right back.
39:19.2
Five hundred dollars per vehicle.
39:21.9
U.S. regulators move
39:23.1
to prevent foreign companies
39:24.6
with potential national security concerns
39:26.6
from certifying wireless equipment.
39:30.1
Federal Communications Commission
39:34.0
certified for the U.S. market
39:35.4
are not influenced
39:36.7
by what it called
39:37.6
untrustworthy actors.
39:40.7
The decision specifically
39:41.8
targets China's Huawei.
39:44.3
Next, JPMorgan Chase
39:46.0
is expected to pay
39:47.4
a hundred million dollars
39:48.4
to U.S. regulators.
39:49.2
The civil penalty
39:50.6
is for the reporting
39:51.7
of incomplete trading data
39:53.6
to surveillance platforms.
39:57.0
U.S. monetary authorities
39:58.1
are pushing through
39:59.7
to require big banks
40:01.2
to hold more capital.
40:02.9
Now, Bloomberg reports
40:03.8
this could be finalized
40:06.2
despite calls from critics
40:07.6
to scrap the plan.
40:09.3
Some changes to the proposals
40:10.7
are said to include
40:12.5
how capital rules
40:13.8
will assess the level of risk
40:16.3
related to a lender's trading
40:18.1
as well as its wealth
40:19.2
management and investment
40:20.8
banking activities.
40:23.6
Japanese investment bank
40:25.2
Nomura earlier upgraded
40:26.6
its 2024 growth forecast
40:28.6
for the Philippines
40:32.6
That's after a better
40:33.5
than expected expansion
40:35.8
Despite this though,
40:37.6
the need to sustain
40:39.5
on infrastructure
40:40.5
will make it difficult
40:41.9
for the Marcos administration
40:43.1
to achieve its fiscal
40:44.6
consolidation goals
40:46.7
To give us its insight
40:47.6
on the Philippine economy,
40:48.8
we now have a look at
40:49.2
Yuben Paracueles,
40:51.3
senior economist at Nomura.
40:53.3
Welcome to Market Edge.
40:56.7
Thanks for having me.
40:58.3
Now, analysts at Nomura
40:59.6
saying the need to sustain
41:02.9
on infrastructure
41:03.6
will make it difficult
41:04.6
for the Marcos administration
41:05.7
to achieve its fiscal
41:07.6
consolidation goals
41:09.4
with budget deficit
41:10.9
likely to stay elevated.
41:12.5
Now, give us a sense
41:13.5
of what are at play
41:16.0
in this overspending
41:17.1
by the government this year.
41:21.7
it's really just a reflection
41:25.1
on the spending side,
41:26.3
a very strong prioritization
41:28.3
of the infrastructure program
41:34.7
President Marcos'
41:36.7
Build Better More scheme.
41:40.4
they had a little bit
41:41.3
of a reality check last year
41:43.4
when growth suffered
41:45.2
because they underspent.
41:48.0
from late last year,
41:49.4
they've now pushed on with that
41:52.1
and kind of started to remove
41:53.5
some of the key bottlenecks
41:55.4
and really now accelerating
41:58.9
So, I think the sort of
42:02.2
are always happening
42:03.8
when you have a new administration
42:04.9
when it comes to implementation
42:06.8
big-ticket infrastructure programs
42:08.4
have already been sort of
42:10.0
have started to be sorted out.
42:11.6
And so, there's enough momentum.
42:13.1
And so, as a result,
42:14.3
I think from the start of this year,
42:16.9
infrastructure spending
42:20.7
if that is the case,
42:23.3
on the revenue side,
42:25.7
the benefits from
42:26.8
all of the reforms
42:27.7
that we've had in the past,
42:29.6
they're largely already
42:31.6
coming into play.
42:34.6
new big-ticket reforms
42:36.7
either on the revenue side.
42:38.5
So, that's kind of
42:39.8
stabilized from there.
42:42.2
we'll see the deficit
42:43.0
actually a little bit wider
42:45.1
what they were initially expecting.
42:48.2
we've seen this already
42:49.0
in the government's
42:51.5
fiscal framework,
42:52.7
which was revised in March.
42:54.3
Pretty big revisions.
43:02.2
versus slightly over 4%.
43:06.4
fiscal deficit projection.
43:09.0
Now, when you talk about
43:11.2
the unmanageables
43:13.8
not much revenue,
43:15.5
new revenue at least,
43:19.8
controlling costs now,
43:21.4
but it seems like
43:22.2
when projects are
43:25.0
for this government,
43:26.1
which was, of course,
43:30.1
or slow spending,
43:35.1
at the very least
43:37.0
and it overshoots
43:38.1
the deficit limit
43:43.1
in the Philippines,
43:44.9
it's a little bit
43:47.1
because there are
43:49.0
rules like in other
43:50.0
countries in Indonesia.
43:51.8
It's a hard rule,
43:59.8
rule that applies
44:01.3
to things like that.
44:10.9
than previous years,
44:21.7
it's a very significant
44:27.2
adjusted the target
44:28.1
to a higher deficit.
44:32.2
points here and there.
44:40.5
and that's kind of,
44:42.4
in the long term,
44:43.1
is actually needed.
44:46.2
about the spending,
44:48.0
for infrastructure,
44:49.1
there are other expenditures
44:50.1
that the government
44:53.8
current situation?
44:55.0
how are you tracking
45:00.1
calamity spending,
45:03.8
that has not been
45:07.1
spending forthcoming
45:08.3
before the year ends,
45:10.7
the already big spending
45:12.7
with the Philippine government.
45:23.7
pickup in spending
45:24.9
more than what is
45:25.7
allocated in the budget
45:35.5
Maybe there's something
45:37.4
being reallocated
45:38.8
from certain funds
45:41.9
some of these shocks
45:45.7
as you mentioned.
45:48.2
in the grand scheme
45:53.1
the budget allocations
45:56.1
So I don't see that
45:59.4
I think it's really more
46:02.0
capital expenditures.
46:04.9
would this year's
46:08.7
Are there new projections
46:11.0
for the Philippines?
46:18.9
which is an improvement
46:23.9
But we're watching
46:25.9
how the Q1 number
46:35.7
looking at high-frequency
46:36.8
numbers for the quarter,
46:39.7
a relatively strong print,
46:41.6
probably tracking
46:47.5
I think it's going to be
46:51.3
I'd say if that number
46:56.4
I think the full-year
46:59.1
some upside risk.
47:02.4
fiscal management.
47:04.0
Finance Secretary
47:05.7
government is not
47:06.4
imposing new taxes,
47:09.3
on what is collected
47:11.7
So, that also means
47:12.8
the Marcos administration
47:15.2
the budget issues
47:18.1
and more borrowing.
47:19.7
What else do you think
47:20.8
could work as a strategy
47:21.8
aside from these?
47:25.6
they can keep focusing
47:28.3
tax administration measures.
47:31.4
just clamping down
47:36.5
and just collecting better
47:43.1
be a bit more efficient
47:44.8
revenue measures.
47:50.7
but they don't help
47:52.1
in a very significant way
47:53.9
to be able to outperform
47:55.7
their fiscal deficit projections.
47:59.8
some of the pending
48:02.2
fiscal reform measures
48:05.6
to be implemented.
48:08.5
the mining tax regime,
48:10.7
and the other things
48:12.8
in the previous packages.
48:14.9
have to be implemented.
48:17.5
I think those things
48:19.3
in the back burner.
48:21.0
The focus is probably
48:22.4
more on the spending side,
48:23.8
particularly on infrastructure.
48:26.1
Pleasure talking to you
48:27.0
about your outlook
48:27.7
for the Philippine economy
48:29.6
You've been Paracueles,
48:36.8
And before we go,
48:37.6
the quest to make
48:38.7
the global aviation industry
48:41.6
from an unusual source,
48:51.2
methane emissions
49:05.4
Aviation accounts
49:07.8
of global carbon emissions.
49:14.6
and currently amounts
49:24.3
I'm Stanley Palisada.
49:25.3
Thank you so much
49:26.7
to our interviews again
49:27.9
on the ANC Market Edge
49:29.3
podcast available
49:31.3
You can also watch
49:33.4
and exclusive content
49:34.3
of our shows online.
49:36.6
ANC YouTube channel,
49:37.9
like us on Facebook,
49:38.8
and follow us on Twitter.
49:40.6
and stay with ANC.
49:46.7
Thank you for watching.
