Philippines' Economic Outlook: Key Developments and Initiatives

Strategic Insights -

The peso rate closed at P55.65 to the US dollar last Friday, while the weighted average rate stood at P55.731. Finance Secretary Cesar V. Purisima expressed optimism about achieving a budget deficit of P150 billion this year, down from the initial target of P180 billion. The International Monetary Fund (IMF) has also endorsed this goal, citing the country's progress in tax reforms. To address concerns about data accuracy, the government has decided to release crucial fiscal reports on a quarterly basis.

Key Takeaways:

  • The peso rate closed at P55.65 to the US dollar, with a weighted average rate of P55.731.
  • Finance Secretary Cesar V. Purisima said a budget deficit of P150 billion is attainable this year, citing the IMF's endorsement of the goal.
  • The IMF has praised the country's progress in tax reforms and believes that a budget deficit of P150 billion is possible.
  • The Department of Finance has adopted the IMF-format in computing public sector debt, resulting in a lower debt of P1.563 trillion.
  • The Government Service Insurance System (GSIS) has announced that it will stick to the fixed interest rate feature of its housing loan program, which is one of the lowest in the industry.
  • The GSIS's Bahay Ko Program (BKP) offers interest rates of 8%, 10%, and 12% for loans of P180,000 or below, P181,000 to P300,000, and above P300,000, respectively.
  • The government is completing its "clean-up drive" on the country's legal and dispute settlement mechanism before implementing the Japan-Philippines Economic Partnership Agreement (JPEPA).
  • The Tariff Commission has completed hearings on chapters 1-97 of the Harmonized Tariff Code, and another hearing for the automotive sector is scheduled for June 14.
  • The JPEPA has a comprehensive coverage, with the Philippines having a keen interest in Japan's services sector, particularly the deployment of medical professionals and IT personnel.

Statistics:

  • P55.65: peso rate against the US dollar last Friday
  • P55.731: weighted average rate
  • P150 billion: target budget deficit for 2005
  • P180 billion: initial target budget deficit for 2005
  • P1.563 trillion: lower debt due to the IMF-format in computing public sector debt
  • 8%, 10%, 12%: interest rates for the GSIS's Bahay Ko Program (BKP)
  • P180,000, P181,000 to P300,000, and above P300,000: loan amount categories for the BKP
  • $853 million: balance of payment accounts surplus for 2005
  • $783 million: balance of payment accounts surplus for the first quarter of 2005
  • $700 million to $800 million: expected "errors and omissions" in accounting
  • 200,000: number of policyholders in China
  • 3,000: number of sales agents in China
  • 10: number of branches planned in China by the end of 2005
  • 600,000: number of policyholders in Hong Kong
  • 400,000: number of policyholders in Indonesia
  • $324 million: combined profit of Manulife's Asian operations (excluding Japan) in 2004
  • 22,100: number of sales agents in the region last year
  • $10 million: annual profit target in each of Manulife's 11 markets in the Asia-Pacific region

Sources:

  • Finance Secretary Cesar V. Purisima
  • International Monetary Fund (IMF)
  • Department of Finance
  • Government Service Insurance System (GSIS)
  • Manulife Financial Corp
  • Bangko Sentral ng Pilipinas (BSP)
  • Securities and Exchange Commission (SEC)
  • Reuters
  • Tariff Commission
  • Office of the Solicitor General
  • Office of the Government Corporate Counsel