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China/US: Of Mountains And Molehills

• That Joe Biden and Xi Jinping will meet in person this week is to be welcomed. Furthermore, low expectations allow both sides to claim some ‘wins’. However, those expectations are rooted in the low probability of any substantive improvement in their relations.

By Alastair Newton

Philippines GDP Growth 5.9% y-o-y (consensus 4.7) in Q3-23

- The Philippines saw a 5.9% year-on-year GDP growth rate in Q3-23, the highest since Q1-23, indicating a brisk economic recovery.
- Although beating market expectations by 1.2pp, the growth rate lagged behind the long-run average by 0.46pp.

Philippines CPI Inflation 4.9% y-o-y (consensus 5.6%) in Oct-23

- In October 2023, Philippines' CPI inflation rate dropped surprisingly sharply to 4.9% year-on-year, the lowest growth since July 2023, and below the one-year average.
- Core inflation also slowed to a year-on-year increase of 5.3% from 5.9%, indicating relatively persistent underlying pressures.

Bangko Sentral Ng Pilipinas: Oct-23

• The BSP’s off-cycle rate hike, driven by elevated inflation projections and the emergence of second-round effects, reflects a proactive stance in pre-empting inflationary pressures and stabilizing the economic environment.
• A balanced view of risks, considering both domestic and global factors, underscores the Monetary Board's commitment to a holistic approach to risk management, demonstrating an understanding of the intricate dynamics influencing inflation.
• The decision to maintain tighter monetary policy settings until a sustained downward trend in inflation is evident, coupled with support for fiscal and non-monetary measures, highlights a strategic focus on balancing economic growth with inflation control, guided by a flexible, data-driven approach.