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Bangko Sentral Ng Pilipinas: Aug-23

• The Monetary Board's decision to retain interest rates at 6.25%, as expected, mirrors a careful balance between fostering growth and managing inflation amid global economic uncertainty.
• Upside risks to inflation are heightened by factors such as rising transport charges, supply constraints, and the impact of El Niño, while a faltering global economic recovery remains the primary downside risk.
• While the BSP anticipates moderated economic activity due to waning pent-up demand and prior policy effects, there's a renewed focus on fiscal measures to support growth and mitigate supply-side price pressures.

Philippines GDP growth -0.9% q-o-q (consensus 0.3) in Q2-23

- Philippines GDP growth in Q2-23 contracted by -0.9% quarter-on-quarter, significantly lower than the consensus estimate of 0.3%, marking the lowest growth since Q2-20.
- The Q2-23 GDP growth was 2.10 percentage points below the long-run average and 2.38 percentage points below the one-year average, indicating a significant deviation from expected growth rates and underperformance in the economy.