More economic news that matters

According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest NewsBriefs, amid the expected global recovery, the Bangko Sentral ng Pilipinas (BSP) is keen on watching for increased capital inflows to emerging markets like the Philippines. This could result in an unexpected spike in inflation, which in turn could hamper BSP’s strategy to exit from the loose monetary environment.

Furthermore, to sustain pump-priming efforts, a Php233 billion new budget deficit cap was set for 2010. The spending package would focus on infrastructure and long term projects in agriculture, health, and other social services. The original programmed budget deficit for next year was Php208.4 billion.

Moreover, the Bureau of Customs expects state revenues from import duties and taxes to reach Php25.1 billion in July, but a billion short of the revenue target due to slackened imports amid weak domestic demand. Latest official data showed imports falling by 32.9% to US$16.3 billion in the January-May from the same period a year ago.

Furthermore, oil companies had another round of oil price increase for the third consecutive week to reflect changes in international prices. The price of gasoline moved up by Php2 per liter while the price of diesel and kerosene increased by Php1.5 per liter.

Likewise, the Manila Electric Company filed a petition before the Energy Regulatory Commission to raise distribution charges by an average of Php0.27 per kilowatt-hour. Factors such as inflation and foreign exchange rate among others were cited as basis for the petition.

However, despite all of these, retailers remain positive about ending the year with a profit in the course of strong OFW remittances and the implementation of the Tourism Act. Philippine Retailers Association chairman Jorge T. Montinola said that consumers have adjusted to the crisis by buying wisely and cautiously.

Also, net foreign investments (FDIs) increased more than a sevenfold in May, the Bangko Sentral ng Pilipinas (BSP) said. Registered FDIs posted a net inflow of US$379 million in May over the US$50 million net inflow a year ago. BSP cites declining inflation and healthy external position among others for encouraging foreign investors to reinvest in local enterprises, according to the same published report.

Lastly, the automotive industry hit its highest number of sales in the seventh month in July and remains positive of strong sales in the coming months. However, local car sales continue to be down by 2.4% to 71,506 from last year according to the same published report, according to IDEA.

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