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Philippines PMI manufacturing 49.7 in Aug-23

- The Philippines' PMI manufacturing posted a contraction with a reading of 49.7 in August 2023, the lowest level since August 2021, and 2.48 points below the one-year average.
- The decline in manufacturing activity could be attributed to negative GDP growth in Q2-23, a trade deficit of -3.92 billion in June 2023, and industrial production growth of only 3.92% year-on-year in the same month.

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.

Philippines industrial production 3.92% y-o-y in Jun-23

- Philippines industrial production experiences the slowest growth since March 2021, with a year-on-year increase of 3.92% in June 2023, significantly lower than the previous rate of 9.89%.
- The trade balance in the Philippines shows a deficit of $3.92 billion in June 2023, indicating higher imports than exports during the period.