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Overseas news
In the US, gross domestic product (GDP) growth in the 2nd quarter was revised to 3.3% from the initially reported 3%. This was due to increased business investments in intellectual property such as artificial intelligence.
GDP is the value of everything a country produces in a given period and so it is an important indicator of an economy’s health.
Additionally, US unemployment claims reached 229,000 for the week ending August 23, a decrease of 5,000 compared to the previous week.
Unemployment can hint at the strength of an economy, and having fewer unemployed individuals often means that the economy is doing better than before.
Local developments
The Bangko Sentral ng Pilipinas (BSP) cut its target reverse repurchase rate by 0.25% to hit 5% on Thursday.
BSP Governor Eli Remolona Jr. called the newly reduced rate a “sweet spot” between keeping inflation manageable and increasing economic output.
Policymakers like the BSP must decide what to do with interest rates so that borrowing costs are neither too high (which can curb economic growth) nor too low (which can bring inflation up).
Meanwhile, the Philippine government is currently seeking tariff exemptions from the US for certain goods, like agricultural commodities, electronics, and aircraft parts. This was according to Trade Undersecretary Allan Gepty.
Tariffs are a type of tax that is applied to items that come from another country. When tariffs are high, those imported goods typically become more expensive, and vice versa.
Further, the national government’s budget deficit shrank 34.4% year-on-year to reach P18.9 billion as revenue growth outpaced spending.
A budget deficit is what happens when a government spends more than it earns. It can be lessened by increasing revenue and cutting spending.
The latest news is mostly positive but doesn’t appear to signal big changes happening soon. Maintaining your strategy while keeping an eye on developments might be the right move for now.
