Overseas news
The US dollar continued to gain against other major currencies, following US retail sales data that was stronger than expected. US Treasury yields also rose, with the 2-year notes hitting fresh 15-year highs.
The sales data and manageable unemployment likely give the US Federal Reserve (the Fed) more reason to deliver a third consecutive interest rate hike of 0.75% by next week
While raising interest rates is one of the ways that the Fed manages inflation, there is a danger that this could lead to a recession. The data points to an economy which is healthy enough to withstand the higher interest rates without much negative effects.
Local developments
OFW remittances grew slightly by 2.3% year-on-year in July. These reached $2.92 billion due to the growth in receipts from land-based and sea-based workers.
Such remittances contribute to the Philippine economy by bringing in money from overseas which is then spent or saved locally.
Moody’s Investors Service kept the Philippines’ “Baa2” credit rating with a “stable” outlook, as challenging global credit conditions are unlikely to get in the way of economic recovery.
This means that the country is seen as medium-grade in terms of investing quality, and is subject to moderate credit risk. Such ratings are based mostly on the historical financial performance of borrowing, lending, and operating of the entity being rated.
Together, these news items are a sign that things might start looking up in the near future, but it’s too early to say that for sure. For now, you can continue being optimistic but careful.
