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Overseas news
In the US, Q2 GDP growth was revised to 3.8% from 3.3%, its quickest pace in nearly 2 years. According to the US Department of Commerce (DOC), this was caused by strong consumer spending and business investment.
GDP figures are among the prime indicators of an economy’s health, although this is perhaps best looked at while keeping the inflation rate in mind.
Further, US President Donald Trump announced a 100% tariff on pharmaceutical products starting October 1. The only exception would be companies building manufacturing plants in the US.
Relatedly, European Union Trade Chief Maros Sefcovic has expressed hopes to arrange free trade agreements with the Philippines and other ASEAN countries by 2027.
The evolving tariff situation around the world is causing many countries to rethink their own approaches to tariffs and related aspects such as trade agreements.
Local developments
The Bangko Sentral ng Pilipinas (BSP) may cut the policy rate as early as October if growth shows signs of a slowdown, said BSP Governor Eli Remolona Jr.
Given the far-ranging impact of a policy rate, central banks such as the BSP and the Fed are cautious when adjusting their respective rates, depending on the inflation picture.
Philippine government infrastructure spending fell by 25% year-on-year in July. This happened as the ongoing corruption issues in the government caused a reduction in disbursements by the Department of Public Works and Highways (DPWH).
Government spending can have a significant impact on the economy, although the effects of this slowdown may take some time to show.
This mix of news doesn’t hint at big changes happening soon. Avoiding big portfolio decisions might be the right thing to do for now.
