Overseas news
China’s capital warned that it was facing its most severe test of the COVID-19 pandemic, shutting businesses and schools in hard-hit districts, and tightening rules for entering the city as infection rates rose in Beijing and nationally. US stocks fell and the dollar gained as investors flocked to safe-haven assets.
The lockdowns in China have caused trouble both for its economy and for supply chains and retailers worldwide. As they continue to be implemented, markets in different countries may often react negatively.
Oil futures had a volatile session, soaring as much as 6% on news that the Organization of the Petroleum Exporting Countries (OPEC) and its allies were considering raising production, then tumbling after Saudi Arabia denied the report. Crude oil prices ended about 0.5% lower.
Futures are contracts to buy or sell a commodity for a certain price at a specified date. Oil futures go up when oil prices are expected to rise, and the reverse is true when they drop.
Local developments
The Department of Finance (DOF) said the National Government’s (NG) budget deficit this year may fall below the “ceiling” due to higher-than-expected revenue collections of the Bureau of Customs (BoC) and the Bureau of Internal Revenue (BIR).
A budget deficit is what happens when a government spends more than it earns, and the “ceiling” is the acceptable limit for this deficit.
The Department of Budget and Management (DBM) may consider slashing the budget allocations for government agencies with low utilization rates. Data from the DBM showed the government’s cash utilization rate was at 94% as of the end of October.
When utilization rates are high, it means that the agencies are using their allocated amount according to their proposed implementation. Low utilization, on the other hand, means that the money could instead have been given to a different agency that would have used it.
Fitch Solutions expects the policy rate of the Bangko Sentral ng Pilipinas (BSP) to end at 5.5% this year and will likely peak at 5.75% by the first half of 2023.
The increases in the policy rate have had an impact on various markets, including bonds and stocks, and so are of interest to many investors.
There aren’t any big changes hinted at in the news this time, and so you can continue to follow your strategy if it’s still working for you.
