Foreign exchange
• Previous week: The local currency showed a continuous appreciating trend in the previous week coming from the upper end of the 44 territory down to the lower end. The trading week started on Tuesday, as Monday was declared a trading holiday due to the pope’s state and pastoral visit to the Philippines. The peso opened the week at 44.61 against the greenback, then appreciated to 44.4 to a dollar on Wednesday. The currency continued to trace a strong peso trend to hit 44.32 to a dollar on Thursday, and ended the week at 44.18 to a dollar. Friday’s close was the strongest for the peso since September last year. The total traded volume is at $3.2 billion, larger than last week’s $2.1 billion.
• Week ahead: In a chance interview with BDO Unibank Inc. chief market strategist Jonathan Ravelas, he said the appreciating trend in the previous week is part of the market’s correction. He further said the bias for a strong dollar is still on the horizon. Markets are expected to look forward to the upcoming local data, although most of them will still come at the end of the week. Ravelas said, for the upcoming week, the peso is likely to range still within the lower band of the 44 territory.
GDP (fourth quarter)
January 29 (Friday)
n Q3 GDP: The local economy posted a weaker-than-expected growth in the third quarter of last year at 5.3 percent. The government pointed to the slump in agricultural production and the national government’s inability to disburse the funds allotted for productive sectors during the period. The growth in the third quarter of 2014 is the lowest for the country in three years and has brought the expected annual growth rate for 2014 outside the target for the year.
• Q4 GDP: Private economists and government officials alike foresee a slight rebound of growth in the last quarter of the year, although not back to the the 7-percent territory as seen in 2013. The BSP, in its full-year inflation report, said high-frequency indicators, such as vehicle sales and purchasing managers index, showed that demand during the period remained buoyant. Moody’s Analytics forecasted a 6.1-percent growth for the period.
M3 growth (December)
January 30 (Friday)
• Previous M3 growth: The country’s domestic liquidity—as broadly measured by M3—grew by 9 percent in November 2014. This is a significant deceleration from the 15.4-percent expansion seen in October 2014. November’s cash-supply growth is the slowest for the country in over two years, or since October 2012, when it hit an 8.7-percent growth. In absolute terms, the total cash circulating in the economy as of end-November last year is at P7.3 trillion.
• December M3 growth: BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said the M3 growth in the country is healthy enough and does not pose a risk anymore to the economy, as agreed upon by private economist Alvin Ang . He also said that M3 is expected to “further normalize” in the coming months.