The Philippines\u2019 gross international reserves (GIR) slipped to its lowest level in two years as of end-August, amid the National Government\u2019s debt repayments and the lower valuation of the central bank\u2019s gold holdings.<\/p>\n\n\n\n
Our View:<\/strong> Although the figure remains at a healthy level, equivalent to 8.3 months\u2019 worth of imports of goods, we note that the declining GIR (now at lowest in 2 years) may add further pressure to manage peso depreciation, which has recently closed above P57.00.<\/p>\n\n\n\n We reiterate that weaker peso is one of the key factors that may induce significant upside risks to inflation. For instance, earlier today, it was reported that Meralco\u2019s residential customers may see a 4% increase in electricity rates due to higher generation charges brought on by peso depreciation. This just shows how weaker peso could seep into domestic inflation aside from other things such as higher food import costs.<\/p>\n\n\n\n Coupling this with second round effects from wage and transportation fare hikes may indicate that inflation could still peak by September\/October despite its deceleration in August. BSP has already mentioned that it has room to further hike policy rates to support the peso and, in turn, manage inflation. Much of the size and pace of BSP’s monetary tightening, will likely take cue from the upcoming Fed rate hike this Sept. 21, underpinning our view that the next Fed\u2019s move could be the crucial and potentially the final inflection point for the market that will lead to it bottoming out depending on the results of the meeting.<\/p>\n\n\n\n We, therefore, expect the PSE index to trade sideways in anticipation to this, ranging from 6,500-6,800 points.<\/p>\n","protected":false},"excerpt":{"rendered":" Here’s a commentary on an important issue or event affecting the stock market <\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-317235","post","type-post","status-publish","format-standard","hentry","category-special-reports","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/317235","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=317235"}],"version-history":[{"count":3,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/317235\/revisions"}],"predecessor-version":[{"id":320528,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/317235\/revisions\/320528"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=317235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=317235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=317235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}