More economic news that matters

According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest NewsBriefs, eleven out of 13 Philippine banks passed the stress tests administered by London-based credit ratings agency Fitch Ratings. Fitch said that passing a “fairly-stressed scenario”, the probability of capital impairment for most Philippine banks remains low. Fitch concluded that most of Philippine banks are prepared to handle the downturn. Also, according to the same published report, state spending and consumption will enable the Philippines to grow by 1.0 - 1.5 percent this year, according to debt watcher Standard and Poor. The Philippines is among the five countries in the region that is expected to post positive growth in 2009 although at a slower pace than others. The government’s growth target for the year is 0.8 - 1.8 percent.

However, Citigroup Global Markets, Inc. reported that the Bangko Sentral ng Pilipinas (BSP) may be raising policy rates in the second half of 2010 as a slow economic recovery will not immediately lead to soaring commodity prices. BSP has slashed key rates by a total of 200 basis points since December to ensure liquidity amid the crisis. Moreover, as of end of July, the recorded budget deficit ballooned to Php188 billion due to lower revenues because of weak economic activity and higher expenditures because of pump-priming activities. The July result is five times the Php33.4 billion deficit recorded in the same period last year and three-fourths of the full-year cap of Php250 billion for 2009.

Moreover, the Bangko Sentral ng Pilipinas reported a balance of payments surplus of $506 million for the month of July, strengthening the country’s external payments position. The July figure is more than six times the $73 million recorded in June on account of sustained investment inflows and global bond sale. Per same report, the 2008 data from the National Statistical Coordination Board show that personal consumption expenditure grew fastest in Northern Mindanao region while NCR still accounted for the greater part of such spending among the country’s 17 regions.

Lastly, it was reported that the joint efforts of eTelecare Global Solutions and Stream Global Services will form a $1 billion international Business Processing Outsourcing that expects to hire 30,000 workers. The merger will create a global BPO leader located in 50 solution centers in over 20 countries in North America, Europe, the Philippines, Latin America, India, Middle East, according to IDEA.

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