Central Bank intervenes to support USD

· Peso strengthened further, hitting a fresh 9-month high of P46.71 to a dollar vs P47.10 the previous day.

· Attributed to strong inflows from overseas workers who sent home funds to families affected by Typhoon Ketsana

· Philippine central bank reportedly bought around $200 million at several levels, with bulk at  46.72 mark.

· The Philippines’ annual inflation rate could fall below zero in August before slightly picking up in the coming months.

· The central bank forecast the annual change in August consumer prices to range between a 0.3% fall and a rise of 0.6%, after a 0.2% climb in July, the slowest in more than two decades.

· Tetangco said the low inflation forecast continues to be driven by base effects mainly from oil and oil-affected products whose prices have dropped significantly year on year.

· “Inflation is expected to take on a slightly increasing pace but still stay in the single-digit path over the forecast horizon.”—he added

· The government will release the official inflation data for August on September 4.

Philippines averts recession with better than expected 2Q09 GDP
The Philippine economy grew better than market expectations in the 2Q09.
COMMENT: GDP rebounded from a -2.1% contraction in the 1Q09 with a +2.4% growth on a seasonally adjusted basis.
The country has officially escaped a recession, helped by government pump-priming and steady remittances
The actual results were better than street expectations of +0.3% Yoy and +1.3% QoQ.
Philippine 2Q09 GDP grew 1.5%   Yoy and +2.4% over 1Q09.
On the demand side, the country’s resilient performance was driven by government spending which increased 9.1% Y/Y.
This was driven by aggressive pump-priming activities in the 2Q09.
Investments in construction expanded by 11.7 percent from 1.0 percent in 2008.
Public Construction rebounded magnificently with 29.9 percent growth from negative 5.6 percent in the previous year.
By industrial origin, the INDUSTRY sector carried growth in the 2Q09 with a seasonal +4.5% growth.
This was bolstered by the strong performances of Mining & Quarrying and Construction.
According to the NSCB, per capita GDP declined by 0.5 percent from 2.1 percent in the previous year.
Per capita PCE also slowed down to 0.3 percent from 2.1 percent.
At current prices, the per capita GNP now stands at P44,828 or US$937 for the first semester.

Philippines can achieve  +1.8% growth for 2009; Look at election themes

With the actual 2Q09 results, the Philippines is now on track to meet upper end of the govt’s.target range for FY2009 which is +1.8% growth.
With GDP growing by +1% in the 1st semester, the Philippines needs to expand 2.6% in the 2H09 to reach +1.8% full year growth.
THis figure is highly achevable according to NEDA officials.
Aside from improving global prospects, stronger domestic  consumption and election spending will prop up the economy in 2H09.
The official target growth range for the year is +0.8% to +1.8%.