FREE Market Commentary: Dominguez Warns of Lower Philippine GDP this Year

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Market Issue or Event

DOF Sec. Dominguez warns of lower 2019 GDP growth due to budget delay. He pointed out that the public spending ban due to the elections also began last March 29. This means the government may not be able to implement new infrastructure projects until June.

 

Our Partner Broker’s View and Commentary

Recall that last year, capital formation and government spending, which together accounted for 44% of GDP, outpaced the growth of consumer spending mostly due to acceleration of infra outlays. Thus, expect a slowdown in the 1st Quarter 2019 GDP growth (to be announced on May 9) due to the public spending ban. This could also further build-up expectations that an RRR cut may be done on the May 9 BSP meeting to support the economy.

We also note that the first tranche of the MSCI China A-shares inclusion is expected to be announced on May 6. Thus, we think it would be advisable for investors to take advantage of any rallies to build up cash in view of these short-term hurdles that could lead to weakness of the PSEi.

 

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AP Securities (formerly Angping & Associates Securities)
AP Securities (formerly Angping & Associates Securities)

AP Securities (formerly Angping & Associates Securities) is one of PinoyInvestor’s partners in delivering superior and reliable stock research reports that help Filipino investors make smart stock investing decisions! Learn more about them here.