According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest NewsBriefs, the efforts of the Bangko Sentral ng Pilipinas (BSP) against the crisis have earned approval from the International Monetary Fund (IMF) while expressing concerns over the government’s revenue collection and ability to support the economy. BSP has continued to cut overnight borrowing rates since the fourth quarter of last year to infuse liquidity into the financial system and spur economic growth. Likewise, data from the BSP showed that the year-on-year number of registered pawnshop offices and branches grew by 7.46% to over 14,000 as of March. However, according to the Chamber of Pawnbrokers of the Philippines, Inc. (CPPI), although the business had been good in the first quarter of the year, several pawnshops shut down operations in the past two months and cited that revenues may have fallen by as much as 50%.
Likewise, the government rejected bids for five-year Treasury bonds after higher interest rates were asked. The Php8.5 billion–worth of re-issued bonds were supposed to be auctioned by the Bureau of Treasury. However, the bids were ranged from 6.25 to 6.30%. High interest bids were said to be caused by the high supply of debt papers, political noise, and revenues problems.
Also, the Federation of Philippine Industries will work with legislators to strengthen their campaign to prioritize locally made products to integrate Filipino industries. This will put the country at par with the US, which already has the said policy in their stimulus plan Foreign portfolio investments posted a net inflow of $498 million in May, better than April’s $276-million gain as investors’ confidence in the economy improved for the month. Meanwhile, for the January to May period, a net inflow of $276 million was recorded, an improvement over the $461-million net outflow recorded during the same period last year. While exports of semiconductor or electronic products have increased by 3.9% in April this year. Semiconductors, which constitute 60% of total commodity exports, follow the worldwide sales trend that rose by 6.4% from the previous month.
However, global debt watcher Standard & Poor’s (S&P) warned that the country can be up to a possible credit rating downgrade if the government fails to meet its budget deficit goal and increase revenues. According to S&P, the ratings depended highly on the state of government revenues and stimulus spending. It also revised its growth forecast for the country from 1.7% to 1.3% because of poor economic performance. Moreover, oil companies increased prices for the fifth consecutive week while the adjustment in the price of cooking gas was deferred. The rise in oil prices was made to reflect the increase in international prices, while that of cooking gas was to reflect the $43 increase in world contract prices for June. The Php1 per kilogram increase in liquefied petroleum gas (LPG) has been moved to June 15.
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