THE MARKET CALL (NOVEMBER 2018)
Here are the highlights of the November issue:
Macroeconomy
Sustained by durable equipment and construction investments and a modest rebound in exports, we see a faster GDP growth of 6.6% in Q4, accelerating further in 2019. Higher dollar remittances in Q4 should likewise support consumption and should somehow buffer the contractionary spending effect of inflation, unless the Bangko Sentral ng Pilipinas (BSP) allows significant appreciation of the peso. With the peaking of inflation in September-October, we think the Monetary Board’s (MB) latest policy rate hike of 25 bps on November 15 will be the last until next year, even if the Fed continues its hiking cycle.