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11
Report on Economic and Financial Developments
EXECUTIVE SUMMARY 1
A. REAL SECTOR
AGGREGATE SUPPLY AND DEMAND 12
LABOR AND EMPLOYMENT 14
B. FISCAL SECTOR
NATIONAL GOVERNMENT CASH OPERATIONS 16
C. MONETARY SECTOR
PRICES 18
DOMESTIC LIQUIDITY 21
DOMESTIC INTEREST RATES 22
MONETARY POLICY DEVELOPMENTS 25
D. FINANCIAL SECTOR
BANKING SYSTEM 27
BANKING POLICIES 33
CAPITAL MARKET REFORMS 33
STOCK MARKET 34
BOND MARKET 36
CREDIT RISK ASSESSMENT 39
PAYMENTS AND SETTLEMENTS SYSTEM 44
E. EXTERNAL SECTOR
BALANCE OF PAYMENTS 45
INTERNATIONAL RESERVES 61
EXCHANGE RATE 62
EXTERNAL DEBT 64
FOREIGN INTEREST RATES 67
GLOBAL ECONOMIC DEVELOPMENTS 69
F. FINANCIAL CONDITION OF THE BSP
BALANCE SHEET 72
INCOME STATEMENT 73
G. CHALLENGES AND FUTURE POLICY DIRECTIONS 74
ANNEXES 79
STATISTICAL TABLES
1
First Quarter 2013
EXECUTIVE SUMMARY
A. Key Economic Developments
The Philippine economy grew at a faster clip
of 7.8 percent in Q1 2013 despite a
challenging global environment. Growth was
broad-based as it drew from the solid
performance of all the three major
production sectors, led by industry sector. On
the expenditure side, higher capital formation
(led by construction) coupled with increased
public and household spending supported the
country’s growth momentum.
The rapid economic expansion was bolstered
by solid macroeconomic fundamentals.
Headline inflation remained near to low end
of the target range of 4 ± 1 percent for 2013,
as the increase in food inflation was offset by
the decline of non-food inflation given lower
electricity rates and the reduction in the
prices of domestic petroleum products.
Similarly, the growth in domestic liquidity or
M3 provided support to the sustained rise of
economic activity. The increase in M3
reflected the robust expansion in net
domestic assets (NDA) arising from the
sustained growth in bank lending to the
private sector.
Meanwhile, the BSP maintained its key policy
rates during the quarter based on the
authorities’ assessment that the inflation
environment continued to be manageable,
with risks to the inflation outlook seen to be
evenly balanced. The BSP, however, reduced
the interest rates on the special deposit
account (SDA) facility to 2.5 percent
regardless of tenor effective 14 March 2013.
The reduction in the SDA rates is consistent
with the BSP’s efforts to fine-tune the
operations of its monetary policy tools to
enhance their effectiveness in promoting
price and financial stability as well as to align
them with international central banking
practices.
The cash operations of the National
Government (NG) yielded a deficit as a result
of increased spending for infrastructure and
other capital outlays. The deficit was higher
than the level posted in the same period in
2012 but was still lower than the
programmed level for the review quarter.
Investor sentiment was boosted largely by
the country's sound macroeconomic
fundamentals as well as the recent upgrade of
rating to investment grade. As a result, the
2
First Quarter 2013
equities market rallied to a new high with the
Philippine Stock Exchange index (PSEi) closing
at 7,071 index points by end-March 2013.
Meanwhile, the persistent downsides risks in
the global outlook caused the country’s
sovereign bond spreads to exhibit mixed
trends.
The Philippine banking system remained
strong amid the challenging global economic
environment. Asset quality continued to
improve, while capital adequacy ratios
remained above international standards. As
of end-September 2012, the universal and
commercial banks’ (U/KBs) average capital
adequacy ratio (CAR) stood at 18.0 percent
and 19.0 percent on solo and consolidated
bases, which were both higher than last
year’s 16.4 percent and 17.4 percent,
respectively.
The economy also continued to gain support
from the external sector’s favorable position.
The balance of payments (BOP) surplus in
Q1 2013 increased to US$1.5 billion from
US$1.2 billion in the comparable period a
year ago.
Meanwhile, the country’s gross international
reserves (GIR) continued to grow to a level
sufficient to cover 11.9 months worth of
imports of goods and payments of services
and income. The peso also continued to
strengthen on the back of steady inflows of
foreign exchange (FX) from overseas
remittances, business process outsourcing
(BPO) receipts, and foreign direct and
portfolio investments.
The Philippine economy grows at a solid
pace. Real Gross Domestic Product (GDP)
grew by 7.8 percent, significantly higher than
the 6.5 percent growth recorded during the
comparable period last year. All three major
production sectors recorded solid output
growth during the quarter, with industry
contributing the highest growth. On the
expenditure side, increased capital formation
(led by construction), coupled with higher
government and household spending
supported overall growth. The country’s real
Gross National Income (GNI) rose by
7.1 percent during the review quarter from
5.7 percent in the same period in 2012.
Likewise, net primary income grew at a faster
pace of 3.2 percent compared to 1.9 percent
in the same period a year ago.
Labor market conditions improve slightly.
Based on the results of the January 2013
Labor Force Survey (LFS) of the National
Statistics Office (NSO), the unemployment
3
First Quarter 2013
rate declined slightly to 7.1 percent from the
7.2 percent posted in the same period in
2012. Employment in the agriculture
contracted by 4.7 percent. This could be
attributed partly to the series of destructive
typhoons that affected not only areas in
Mindanao but also those in Luzon and
Visayas. Meanwhile, employment in the
industry and services sectors recorded
increases at 6.0 percent and 4.3 percent,
respectively. The ratio of underemployed to
total employed persons increased at
20.9 percent during the review period
compared to the 18.8 percent posted in the
same period in 2012.
NG cash operations yield a higher deficit.
The cash operations of the NG yielded a
deficit of P66.5 billion in Q1 2013, about
twice the deficit recorded in the same period
of 2012. However, it was lower than the
programmed deficit of P73.9 billion for the
review quarter. Total revenues for the review
period reached P364.3 billion, higher than the
year-ago level of P361.0 billion due mainly to
improved collections by the Bureau of
Internal Revenue (BIR). Meanwhile, total
expenditures amounted to P430.8 billion,
9.1 percent higher than the P394.9 billion
expenditures incurred a year ago, although
this amount is 4.8 percent lower than the
P452.7 billion programmed expenditures for
the quarter. The growth in expenditures can
be attributed mainly to increased
infrastructure spending and capital outlays.
Inflation increases slightly. Year-on-year
(y-o-y) headline inflation increased slightly to
3.2 percent in Q1 2013 from 2.9 percent in
the previous quarter and 3.1 percent a year
ago. However, headline inflation remained
well within the Government’s target range of
4 ± 1 percent for 2013. The slight uptick in
headline inflation was due mainly to higher
food prices, notably rice, meat, and
vegetables, as well as higher prices of
alcoholic beverages and tobacco products
following the implementation of Republic Act
(RA) No. 10351 which raised the excise tax on
alcohol and tobacco products in January
2013. Non-food inflation, on the other hand,
decelerated given lower electricity rates and
the reduction in the prices of domestic
petroleum products. Core inflation, which
excludes some food and energy items to
measure generalized price pressures, rose to
3.8 percent in Q1 2013 from 3.4 percent in
the previous quarter and 3.5 percent a year
ago.
Domestic liquidity expands further. Demand
for money or M3 grew by 13.3 percent y-o-y
4
First Quarter 2013
as of end-March 2013, faster than the
10.6 percent growth as of end-December
2012. The increase in M3 was driven by the
expansion in net domestic assets (NDA) by
25.3 percent y-o-y in March 2013, owing
largely to the sustained increase in net
domestic credits, particularly to the private
sector. Meanwhile, the growth of net foreign
assets (NFA) decreased anew by 0.8 percent
y-o-y in March 2013 after contracting slightly
by 0.1 percent in December 2012. The NFA of
banks contracted as banks’ foreign liabilities
continued to increase given higher
placements and deposits made by foreign
banks with their local branches and other
banks, while their foreign assets decreased
due to the decline in loan receivables.
The BSP maintains key policy rates but cuts
SDA rates. During the policy meetings of the
Monetary Board (MB) on 24 January and
14 March 2013, the monetary authorities
decided to maintain key policy interest rates
at 3.50 percent for the overnight borrowing
or reverse repurchase (RRP) facility and
5.50 percent for the overnight lending or
repurchase (RP) facility. The MB policy rate
decisions were based on its assessment that
the inflation environment over the policy
horizon was likely to remain manageable. The
interest rate on the BSP RRP was also kept at
3.50 percent regardless of tenor. The reserve
requirement ratios were kept steady, as well.
Meanwhile, the BSP reduced the interest
rates on the SDA facility by 50 bps each
during its policy meetings in January and
March 2013. By 14 March 2013, the SDA rate
was set at 2.5 percent regardless of tenor.
The reduction in the SDA rates is consistent
with the BSP’s efforts to fine-tune the
operations of its monetary policy tools to
enhance their effectiveness in promoting
price and financial stability as well as to align
them with international central banking
practices. Amid manageable liquidity growth
and a benign inflation environment, the
operational refinements in the SDA were
expected to enhance the ability of the BSP to
ensure that liquidity remains in line with
funding requirements of the economy amid
the continued inflow of FX to the economy.
Domestic market interest rates decline.
Yields on government securities in both
primary and secondary markets decreased
during the quarter on the back of positive
market sentiment, buoyed by a manageable
inflation outlook, ample liquidity, sustained
economic growth, and recent upgrade to
investment grade rating for the Philippines by
a major credit rating agency.
5
First Quarter 2013
The Philippine banking system remains
sound and stable. The Philippine banking
system remained resilient amid the subdued
global economic environment. Banks’ core
balance sheets were marked by steady
growth in assets, deposit base, and capital
accounts. Asset quality also continued to
improve, while capital adequacy ratios
remained above international standards. The
total resources of the banking system rose by
9.3 percent to P8.4 trillion as of
end-December 2012 due largely to the
growth in loans, securities, and equities,
which are indicative of the public’s continued
trust in the banking system. Commercial
banks' outstanding loans continued to grow
steadily at double-digit growth rate at
14.7 percen y-o-y by end-March 2013.
Meanwhile, the non-performing loans (NPL)
ratio of the banking system sustained its
downward path, easing to 2.5 percent as of
end-December 2012 from 2.8 percent in the
same period in 2011, reflecting banks’
continuing initiatives to improve asset quality
along with prudent lending regulations.
Meanwhile, the banking system’s capital
adequacy ratio (CAR) remained above
standards at 17.6 percent as of
end-December 2011, as banks either
increased their retained earnings or issued
capital instruments to match the rise in their
risk-weighted assets in line with increased
lending activity.
The equities market rallies to a new high. In
Q1 2013, the PSEi rose by 15.9 percent q-o-q
or by 33.5 percent y-o-y to average
6,434.0 index points. This was due largely to
investors’ optimism over the outlook for the
Philippine economy. Overseas, signs of the
strengthening US recovery and the more
aggressive monetary easing by the Bank of
Japan also helped improve risk sentiment and
buoyed demand for local shares. However,
investors’ risk appetite were partly tempered
by profit-taking amidst growing concern that
local valuations are already expensive and
renewed worries over the euro zone debt
crisis following the Cyprus banking crisis.
The risk premia on the country’s debt papers
exhibit mixed trend. Reflecting the persistent
downside risks to the global outlook, the
country’s debt spreads exhibited mixed
trends in the first quarter of 2013. The
EMBI+Philippine spreads, or the additional
yield investors demand to hold Philippine
debt securities over US Treasuries, widened
to 136 basis points (bps) from the previous
quarter’s average of 122 bps. On the other
hand, the credit default swap (CDS) spread, or
6
First Quarter 2013
the cost of insuring the country’s 5-year
sovereign bonds against default, was almost
stable to average 102 bps during the quarter.
The country’s CDS spreads also dropped
below 100 bps to its year’s low of 93.5 bps on
8 March 2013. Compared to neighboring
economies, the Philippine CDS traded lower
than Indonesia’s average of 140 bps and
traded closer to Thailand’s 92 bps and
Malaysia’s 82 bps. The credit rating upgrade
received from Fitch Ratings on 27 March 2013
did not translate into a significant tightening
of Philippine debt spreads. This reflected that
expectations for a rating upgrade have
already been priced-in by market participants,
limiting the scope for further gains.
BOP position registers a higher surplus. The
country’s BOP in Q1 2013 registered a surplus
of US$1.5 billion, higher compared to the
US$1.2 billion in the same period a year ago.
The improvement in the country’s external
payments position was underpinned by the
robust performance of the current account,
particularly the higher surplus in the services
and secondary income accounts as well as the
lower deficit in the goods and primary income
accounts. Meanwhile, the financial account
recorded lower net borrowings by residents
from the rest of world on account mainly of
the higher net repayment of liabilities in the
other investment account combined with the
decline in the net incurrence of liabilities in
the direct investment account.
International reserves continued to rise. The
country’s GIR reached US$84.0 billion as of
end-March 2013, 15.4 percent higher than in
the previous year. At this level, the GIR was
sufficient to cover 11.9 months worth of
imports of goods and payments of services
and income. The corresponding reserve
adequacy ratios at this GIR level were
9.9 times the country’s short-term external
debt based on original maturity and 6.3 times
based on residual maturity. Inflows from the
FX operations and investment income of the
BSP as well as foreign currency deposits by
the NG contributed to the increase in the GIR
level. However, these inflows were partly
offset by FX outflows, such as payments for
maturing FX obligations by the NG and foreign
currency withdrawals by a government–
owned and –controlled corporation.
Debt ratios remain at comfortable levels. As
of end-March 2013, the outstanding
BSP-approved/registered external debt
stood at US$59.0 billion, down by
US$1.3 billion or 2.1 percent from the
end-December 2012 level of US$60.3 billion.
On a y-o-y basis, the debt stock fell by
7
First Quarter 2013
US$2.6 billion (or 4.2 percent) from the
end-March 2012 level of US$61.6 billion.
The q-o-q decline in the debt stock was
attributed to the downward FX revaluation
adjustments due largely to the strengthening
of the US dollar against the Japanese yen and
as well as net repayments (US$282.0 million).
These were partially offset by increased
investments by non-residents in Philippine
debt papers (US$421.0 million) due to
sustained investor confidence in the country
coupled with a dearth of attractive
investment instruments.
Meanwhile, the y-o-y decline was due to
negative FX revaluation adjustments
(US$2.0 billion) and increase in residents’
investments in Philippine debt papers
(US$727.0 million).
The country’s external debt to GNI ratio
sustained its improving trend, easing further
to 19.1 percent as of end-March 2013 from
the ratio of 20.2 percent at end-December
2012 and 22.5 percent recorded at
end-March 2012. Similarly, the external
debt-to-GDP improved to 22.8 percent during
the review period from 24.1 percent a quarter
ago and 26.9 percent a year ago.
The peso continues to strengthen. The peso
averaged at P40.70/US$1, appreciating by
1.2 percent from the previous quarter’s
average of P41.19/US$1. The domestic
economy’s resiliency, along with the broadly
strengthening global recovery underpinned
by continued policy accomodation by various
central banks, and steady FX inflows from
overseas Filipino remittances and business
process outsourcing (BPO) supported the
gains of the peso.
The global economy weakens. Global
economic activity weakened in Q1 2013
weighed down by the soft economic activity
in advanced economies and prolonged period
of slow growth in the euro area and Japan.
The euro area’s GDP further deteriorated by
0.1 percent from the 0.9 percent decline in
Q4 2012. Tough austerity measures imposed
by debt-ridden governments have been
undermining domestic consumption in the
region.
Economic activity in Japan likewise weakened
in Q1 2013, with GDP growing only by
0.2 percent from the last quarter’s
0.5 percent due to lower capital spending.
Nonetheless, Japan’s economy is expected to
resume its moderate recovery supported by
8
First Quarter 2013
aggressive monetary easing, stimulus
spending and the expected pick-up in global
growth.
The US GDP growth rate accelerated slightly
to 1.8 percent in Q1 2013 from the previous
quarter’s 1.7 percent. This growth was driven
by positive contributions from personal
consumption expenditures, private inventory
investment, residential fixed investment, and
nonresidential fixed investment, which partly
offset the negative contributions from
government spending.
Among the newly-industrialized economies
(NIEs) in Asia, countries such as Hong Kong
and South Korea grew by the same rate as in
the previous quarter, at 2.8 percent and
1.5 percent, respectively. Meanwhile, China’s
GDP slightly slowed down to 7.7 percent in
Q1 2013 compared to 7.9 percent in the
previous quarter. The weak government
spending on infrastructure projects, such as
urban subways, and the frail moves of the
central bank to boost liquidity in the banking
system weighed down on China’s GDP
growth.
B. Challenges and Policy Directions
While the global economy is seen to broadly
strengthen through 2013, persistent
downside risks continue to weigh on the
overall world economic outlook. In particular,
the effects of ongoing financial sector
adjustments in the euro area and fiscal
consolidation in the US could continue to
dampen international trade flows, weaken
market sentiment, and raise volatility in
financial markets. In addition, Japan’s
monetary policy easing, aimed at stimulating
its economy, could have important global
trade dynamics implications. Meanwhile, the
recent signs of improvement in the US
economy could lead to possible capital flow
reversals from emerging economies. The
biggest challenge for policymakers, especially
those in emerging economies, is to provide
sufficient buffers against adverse external
developments while moderating the build-up
of domestic imbalances. In particular, the
challenge of managing large capital flows is
likely to lead to continuing exchange rate
pressures in many emerging economies.
For the Philippines, keeping the economy on a
steady growth course would require policies
largely aimed at nurturing domestic sources
of growth to help compensate for any
9
First Quarter 2013
weaknesses in external demand. In this
regard, close coordination between fiscal and
monetary policies will help ensure that the
macroeconomic environment remains
supportive of sustainable and balanced
growth.
The favorable fiscal position of the NG
provides it with sufficient policy space to
support projects that will continue to
stimulate aggregate demand. Growth could
further accelerate once the various
infrastructure projects move forward.
Furthermore, continuing social spending
programs for health, education, housing,
employment, and conditional cash transfers,
as well as initiatives for financial inclusion and
consumer protection, shall help promote
inclusive and sustainable growth.
For its part, the BSP remains committed to its
mandate of safeguarding price stability and
ensuring a macroeconomic environment
conducive to growth. With a broadly benign
inflation outlook, the BSP deems its policy
stance appropriate. Latest baseline forecasts
indicate that the future inflation path remains
in line with the target for 2013-2014,
supported by firmly anchored inflation
expectations. The risks surrounding the
inflation projections also continue to be
broadly balanced. Downside risks to the
inflation outlook center on the uncertainty
over the strength of the global economy and
its effects on global commodity prices,
particularly oil. In addition, the firmness of
the peso could temper imported inflation.
However, additional petitions for utility rate
adjustments, with likely power rates increase
in Mindanao, and the impact of sustained FX
inflows on domestic liquidity growth could
exert upside pressures on inflation and would
thus need to be monitored closely.
Of particular challenge moving forward is the
continued surge in capital inflows to the
country, which has pushed up the peso
further against the US dollar. In addition, the
recent credit rating upgrades given by Fitch
Ratings and Standard and Poor’s as well as
market expectations of a further credit rating
upgrades by other credit rating agencies for
the Philippines could attract further foreign
capital, posing risks to inflation and financial
stability. Against this backdrop, the BSP
stands ready to employ, from its menu of
policy instruments, measures that will help
ensure that the benefits of capital flows are
maximized while warding off the potential
destabilizing impact of volatile capital flows
on price and financial stability. The BSP will
also continue to maintain a market-
10
First Quarter 2013
determined exchange rate, while guarding
against speculative flows that could
contribute to the peso’s volatility and
undermine the inflation target.
Amid downside risks to global economic
prospects on the horizon, contingency
measures are in place to ensure adequate
liquidity in the financial system should capital
flows reverse course. The BSP will maintain a
comfortable level of international reserves to
serve as added insurance against external
shocks.
However, guarding against destabilizing
financial market imbalances arising from
capital inflow surges imposes a cost on the
BSP. In this regard, efforts are also being
undertaken to reinforce the BSP’s capacity to
manage these risks effectively. The full
capitalization of the BSP is being pursued to
enhance its financial position and help ease
the constraints posed by balance sheet
weaknesses and operating losses. This is
complemented by a number of proposed
amendments to the BSP Charter, including:
(1) increasing the BSP’s authorized capital
from P50.0 billion to a higher level
commensurate with the expansion in the size
of the economy and the financial system;
(2) setting up of a formal arrangement on the
sharing of gains and losses by the NG and the
BSP; (3) restoring the BSP’s ability to issue its
own debt securities to enable it to siphon
excess money supply from circulation;
(4) allowing the BSP to set up reserves to
absorb losses from FX fluctuations; and
(5) granting of tax exemption to the BSP.
In the area of banking regulation and
supervision, the BSP will sustain the reform
momentum with a view to strengthen the
resilience of the banking system against
shocks as well as to enhance its role as a
catalyst for durable long-term economic
growth. Toward this end, the BSP continues
to enhance its monitoring of financial market
developments as it also continues to put in
place measures to strengthen the capacity of
the banking system to endure shocks,
including the adoption of expanded reporting
standards for real estate exposures as well as
the Basel III capital adequacy standards
beginning January 2014. Likewise, the BSP
continues to take the lead in promoting
financial inclusiveness with programs and
reforms aimed at promoting greater access to
financial services.
The BSP also remains proactive in ensuring
the credibility of the payments and
settlements system with the continued
11
First Quarter 2013
enhancement of its processes in accordance
with international best practices.
Finally, amid the increasing
interconnectedness of global financial
markets, the BSP will remain an active
participant in regional and international
cooperation programs and fora, in order to
reap the benefits of collaborative
engagement.
12
MAIN REPORT
A. Real Sector
Aggregate Supply and Demand
Philippine economy continued to exhibit vibrant growth in
the first quarter of 2013. Real Gross Domestic Product
(GDP) accelerated by 7.8 percent in Q1 2013, faster than
the 6.5 percent growth posted a year ago. On the supply
side, economic growth was broad-based supported by all
three sectors – industry, services and agriculture sectors.
On the demand side, growth was propelled by strong
capital formation and government as well as private
consumption expenditures.
GDP by industry
The services sector remained the key source of growth for
the Philippine economy during the quarter in review after
contributing 3.9 percentage points to real GDP growth.
Growth in this sector was at 7.0 percent in the first
quarter of 2013, albeit lower than the 8.4 percent posted
in the previous year. Contributing largely to the services
sector’s sustained growth during the review quarter was
the 13.9 percent expansion on the financial
intermediation sub-sector supported by strong business
and consumer confidence as well as low interest rates
which continued to support bank lending activities. Other
major contributors to the services sector’s growth were
The Philippine economy sustains
robust growth
Services continue to drive output
expansion
Real Gross Domestic Product andReal Gross National Incomeannual growth rates in percent
0
2
4
6
8
10
12
14
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Real GDP Real GNI
20112010 2012 2013
Real GDP, By Industry annual growth rates in percent
-3
0
3
6
9
12
15
18
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Agriculture, Fishery and Forestry Industry Services
20112010 2012 2013
13
public administration and defense (8.0 percent); other
services (7.6 percent), which include tourism-related
activities (recreational, cultural and sporting activities);
and real estate, renting and business activities
(6.3 percent), which includes the buoyant business
process outsourcing sector.
Closely following is the industry sector which contributed
3.5 percentage points to the real GDP growth during the
review quarter. The industry sector growth of
10.9 percent in Q1 2013 was more than twice the 5.3
percent growth it posted in the same period last year. The
major contributors of the growth in the sector were
sustained double-digit growth in the construction sub-
sector (32.5 percent) supported by continued expansion
in both public and private construction; and the strong
performance of the manufacturing sub-sector
(9.7 percent) driven by the strong domestic demand for
food manufactures.
The agriculture, hunting, forestry and fishing (AHFF)
sector also posted positive contribution of 0.4 percentage
point to the real GDP growth during the first quarter of
2013. The sector performed well with a 3.3 percent
growth after growing by 1.1 percent last year. Overall
agricultural output was supported by the expansion in
crop production (which accounts for 52.0 percent of total
output of AHFF) by 3.5 percent; and strong rebound of
the fisheries production (5.5 percent), from contraction in
the past quarters.
14
GDP by expenditure
On the expenditure side, Philippine economic growth,
which has traditionally been driven by robust private
consumption, also found strong support from the robust
expansion of capital formation (47.7 percent) and
increased government spending (13.2 percent). The
strong growth of the capital formation account was
largely driven by the continued expansion of construction
activities, both public and private. Meanwhile, the robust
government consumption during the review quarter was
propelled by higher public spending due to increase
disbursements to finance the social welfare programs of
the government as well as the requirements of the
4th tranche of the Salary Standardization Law III (SSL3).
Overall, the economic growth during the first quarter of
2013 was propelled by the rise in infrastructure activities,
higher business and consumer confidence, favorable
interest rates, stable inflation, sustained tourism arrivals,
and continued bright prospect on the Philippine economy.
Labor and Employment
Based on the results of the January 2013 Labor Force
Survey (LFS) of the National Statistics Office (NSO), the
unemployment rate declined slightly to 7.1 percent in the
first quarter of 2013 from 7.2 percent registered in the
same period of 2012 (Table 2).
Labor market conditions improve
slightly
15
The level of employed persons rose by 1.6 percent during
the review quarter, lower than the 2.9 percent growth
recorded in the comparable period in 2012. The lower
growth in the level of employment was due mainly to the
decline in employment in the agriculture sector
(-4.7 percent). This could be attributed partly to the
series of destructive typhoons that affected not only areas
in Mindanao but also those in Luzon and Visayas.
Meanwhile, employment in the industry and services
sector recorded increases at 6.0 percent and 4.3 percent,
respectively. Of the 37.9 million total employed persons,
54.1 percent were employed in the services sector, while
the agriculture and industry sectors employed
30.4 percent and 15.5 percent, respectively. The ratio of
the underemployed to total employed persons increased
to 20.9 percent during the quarter in review, from the
18.8 percent posted in the same quarter in 2012. Of the
7.9 million underemployed persons, the services sector
accounted for 42.3 percent, while the underemployed in
the agriculture and industry sectors was placed at
41.8 percent and 15.9 percent of the total, respectively.
Classified by status of employment, employment rate
increased among wage and salary workers (10.9 percent
from 3.7 percent) and employers in own-family operated
farm or business (1.9 percent from -0.2 percent). By
contrast, employment levels posted large decreases
among self-employed workers (-8.1 percent from
0.6 percent) and workers without pay in own-family
6.0
6.5
7.0
7.5
8.0
8.5
17
18
19
20
21
22
23
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Underemployment Rate (RHS)
Unemployment Rate (LHS)
Unemployment and Underemployment Ratesin percent
20112010 2012 2013
16
operated farm or business (-17.5 percent from
5.8 percent).1
B. Fiscal Sector
National Government Cash Operations
The cash operations of the national government (NG)
yielded a deficit of P66.5 billion in Q1 2013. This level is
about twice the P33.9 billion deficit recorded in the same
period in 2012. However, it is lower than the
programmed deficit of P73.9 billion for the review
quarter.
Total revenues for the review period reached
P364.3 billion, higher than the year-ago level of
P361.0 billion due mainly to improved collections by the
Bureau of Internal Revenue (BIR). The Q1 2013 revenue
level is 3.8 percent lower than the target level for the
quarter of P378.8 billion. Tax collections, which
constituted 86.9 percent of total revenues, amounted to
P316.7 billion, 4.8 percent higher than the year-ago level
but 6.3 percent lower than the programmed tax revenue
during the review period. Likewise, non-tax revenues,
including grants, which consisted mainly of collections
made by the Bureau of the Treasury (BTr), declined by
1 An employer is a person working in his own business, farm, profession or trade who has one or more regular paid employees, including paid family
members. Unpaid family workers include persons who worked without pay on own family-operated activities. Domestic helpers, family drivers and other
household helpers who assist in the family-operated business, regardless of time spent in this activity, are not hired employees in the
enterprise/business. A retail store operator who is wholly assisted in the operation of his store by unpaid relatives living with him and who employs
carpenters to construct a new building for his store (with store operator supervising the work) is not an employer. However, if an operator happens to be
the owner or partner of a big firm which has its own construction unit to take care of its needs, the operator is an employer.
(Source: http://www.bles.dole.gov.ph/)
NG cash operations yield a deficit
-150
-75
0
75
150
225
300
375
450
525
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Revenues Expenditures Surplus/(Deficit)
2010
Cash Operations of the National Governmentin billion pesos
2011 2012 2013
Surplus/(Deficit): Actual vs. ProgramSurplus/(Deficit): Actual vs. Programin billion pesos
-150
-135
-120
-105
-90
-75
-60
-45
-30
-15
0
15
30
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Actual Program
2010 2011 2012 2013
17
18.9 percent from the year-ago level. However, non-tax
revenue exceeded by 16.3 percent the programmed level
for the review period.
Meanwhile, total expenditures reached P430.8 billion in
Q1 2013, 9.1 percent higher than the P394.9 billion
expenditures incurred a year ago, although this amount is
4.8 percent lower than the P452.7 billion programmed
expenditures for the quarter. The bulk of expenditures
was channeled to infrastructure spending and capital
outlays.
The NG’s net financing for the first quarter of 2013
amounted to P-0.8 billion, significantly lower than the
year ago level of P162.5 billion for the review quarter.
The net financing was sourced mainly from net domestic
borrowings amounting to P48.5 billion. Meanwhile, the
NG recorded external obligations amounting to
P-49.3 billion in the review quarter. The net financing was
based on a gross financing mix ratio of 97:3, in favor of
domestic sourcing.
Moving forward, the NG will continue to pursue fiscal
consolidation in the medium term by supporting
legislative initiatives to raise revenues and widen the tax
base while pursuing parallel efforts to reinforce tax
administration and ensure an efficient expenditure
management program.
18
C. Monetary Sector
Prices
Year-on-year (y-o-y) headline inflation increased to
3.2 percent in Q1 2013 from the quarter-ago and year-ago
rates of 2.9 percent and 3.1 percent, respectively.
The uptick in headline inflation was due mainly to higher
food prices, notably rice, meat, and vegetables, as well as
higher prices of alcoholic beverages and tobacco
products. Non-food inflation, on the other hand,
decelerated given lower electricity rates and the
reduction in the prices of domestic petroleum products.
On a quarter-on-quarter (q-o-q) basis, headline inflation
increased to 0.7 percent in Q1 2013 from 0.2 percent in
Q4 2012.
Core inflation, which excludes some food and energy
items to measure generalized price pressures, rose to
3.8 percent in Q1 2013 from 3.4 percent in the previous
quarter and 3.5 percent a year ago. However, two out of
three alternative measures of core inflation estimated by
the BSP fell in Q1 2013 relative to the rates registered in
the previous quarter. In particular, the trimmed mean and
weighted median measures declined to 3.0 percent and
2.7 percent, respectively, from the previous quarter’s
3.1 percent and 3.0 percent. The net of volatile items
Inflation increases due to higher
prices of food items, alcoholic
beverages, and tobacco products
Core inflation also rises
Inflation Rate (2006=100)Inflation Rate (2006=100)in percent
2
3
4
5
6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Philippines NCR Areas Outside the NCR
2010 2011 2012 2013
Alternative Core Inflation MeasuresAlternative Core Inflation Measuresquarterly averages of yearquarterly averages of year--onon--year changeyear change
Official Core Inflation Trimmed Mean 1 Weighted Mean 2 Net of Volatile Items 3
2011 4.3 3.8 3.1 3.6
Q1 4.0 3.3 2.9 3.7
Q2 4.3 4.0 3.1 3.7
Q3 4.4 4.0 3.2 3.5
Q4 4.5 3.8 3.1 3.6
2012 3.7 3.1 3.0 3.4
Q1 3.5 3.0 2.6 3.0
Q2 3.7 3.0 3.2 3.3
Q3 4.1 3.3 3.2 3.9
Q4 3.4 3.1 3.0 3.4
2013
Q1 3.8 3.0 2.7 3.81 The trimmed mean represents the average inflation rate of the (weighted) middle 70 percent in a lowest-to-highest ranking of year-on-year inflation rates for all CPI components.2 The weighted median represents the middle inflation rate (corresponding to a cumulative CPI weight of 50 percent) in a lowest-to-highest ranking of year-on-year inflation rates.3 The net of volatile items method excludes the following items: educational services, fruits and vegetables, personal services, rentals, recreational services, rice, and corn. The series
has been recomputed using a new methodology that is aligned with NSO’s method of computing the official core inflation, which re-weights remaining items to comprise 100
percent of the core basket after excluding non-core items. The previous methodology retained the weights of volatile items in the CPI basket while keeping their indices constant at
100.0 from month to month.
Source: NSO and BSP estimates
19
measure, meanwhile, increased to 3.8 percent from
3.4 percent in Q4 2012.
Food inflation increased to 2.7 percent in Q1 2013
compared to the quarter- and year-ago rates of
2.2 percent and 1.9 percent, respectively. Tight domestic
supply conditions, triggered by weather-related
production disruptions, led to higher retail prices of key
food items, particularly rice, meat, and vegetables. The
inflation rate of rice, meat, and vegetables went up to
1.7 percent, 1.8 percent, and 0.2 percent, respectively,
from the quarter-ago rates of 1.6 percent, 1.5 percent,
and -3.6 percent.
Similarly, alcoholic beverages and tobacco inflation went
up to 25.9 percent from 5.0 percent in the previous
quarter following the implementation of Republic Act (RA)
No. 10351 which raised the excise tax on alcohol and
tobacco products in January 2013.
Non-food inflation slowed down to 2.8 percent during the
review quarter from 3.4 percent in the previous quarter
and 3.9 percent a year ago. Lower inflation for electricity,
gas and other fuels, and transport supported the decline
in non-food inflation. In particular, from 3.6 percent in
Q4 2012, electricity, gas and other fuels inflation
decelerated to 0.9 percent in Q1 2013 due to lower
electricity charges and liquefied petroleum gas (LPG)
prices. Similarly, transport inflation went down to
Higher prices of rice, meat, and
vegetables drive up food inflation
Slower price increases for electricity,
gas, and other fuels contribute to the
reduction in non-food inflation
Food and NonFood and Non--Food Inflation (2006=100)Food Inflation (2006=100)in percent
1
2
3
4
5
6
7
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Headline Inflation
Food Inflation
Non-Food Inflation
2010 2011 2012 2013
20
0.9 percent from 1.5 percent in the previous quarter due
to slower price increases for gasoline and diesel.
In terms of geographical location, the headline inflation
rate for Metro Manila (MM) edged lower to 2.2 percent
from both its quarter-ago and year-ago rate of
2.8 percent. Meanwhile, inflation rate in areas outside
Metro Manila (AOMM) climbed to 3.5 percent compared
to its quarter-ago and year-ago rates of 3.0 percent and
3.2 percent, respectively.
In MM, food inflation increased to 2.5 percent in Q1 2013
from 1.6 percent in the previous quarter given higher
retail prices of rice, fruits, vegetables, and sugar. By
contrast, non-food inflation slowed down to 1.9 percent
from 3.1 percent in Q4 2012 due largely to lower inflation
for housing, water, electricity, gas and other fuels, and
transport.
In AOMM, food inflation went up to 2.7 percent from
2.4 percent in Q4 2012 due mainly to the increase in
prices of key food items, particularly rice, corn, meat, and
vegetables. Non-food inflation however, fell to
3.1 percent in Q1 2013 from 3.4 percent in the previous
quarter given slower price increases for housing, water,
electricity, gas and other fuels, and transport.
On a q-o-q basis, headline inflation in MM and AOMM
increased to 0.2 percent and 0.9 percent, respectively, in
Inflation exhibits mixed trends in
MM and in AOMM
Inflation Rate (2006=100)Inflation Rate (2006=100)in percent
2
3
4
5
6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Philippines NCR Areas Outside the NCR
2010 2011 2012 2013
21
Q1 2013 from -0.1 percent and 0.3 percent in the previous
quarter.
Domestic Liquidity 2
Demand for money or M3 grew by 13.3 percent y-o-y as
of end-March 2013 to reach P5.1 trillion. This growth was
faster than the 10.6 percent expansion as of
end-December 2012 (Table 5).
The increase in M3 was driven by the 25.3 percent y-o-y
expansion in net domestic assets (NDA) in March 2013,
owing largely to the sustained increase in net domestic
credits. Net domestic credits, in turn, increased by
15.6 percent y-o-y. Credits extended to the private sector
grew by 15.9 percent, consistent with robust lending
activity by commercial banks. Likewise, credits to the
public sector rose by 15.0 percent.
Meanwhile, net foreign assets (NFA) decreased anew by
0.8 percent y-o-y in March 2013 after contracting slightly
by 0.1 percent in December 2012. The BSP’s international
reserves rose further due mainly to robust foreign
exchange inflows from overseas remittances, portfolio
investments, and BPO receipts. However, the NFA of
banks contracted further as banks’ foreign liabilities
continued to increase given higher placements and
deposits made by foreign banks with their local branches
2 The indicators used for money supply are: M1 (or narrow money), comprised of currency in circulation and demand deposits; M2, composed of M1 plus
savings and time deposits (quasi-money); M3, consisting of M2 plus deposit substitutes; and M4, consisting of M3 plus foreign currency deposits.
Domestic liquidity expands further
M4: Domestic Liquidity and FCDsM4: Domestic Liquidity and FCDsvalue in billion pesos; share in percent
M3
84%
FCDs
16%
M3
82%
FCDs
18%
end-March 2013end-March 2012
Particulars
Levels (in billion pesos) Growth Rates (%)
Mar
2013
Dec
2012
Mar
2012Q-on-Q Y-on-Y
Domestic Liquidity (M3) 5,139.1 5,171.7 4,535.9 -0.6 13.3
of which:
Net Foreign Assets (NFA) 3,219.3 3,246.7 3,245.4 -0.8 -0.8
Net Domestic Assets (NDA) 2,970.5 2,973.9 2,370.1 -0.1 25.3
of which:
Public sector credit 1,566.9 1,336.9 1,362.2 17.2 15.0
Private sector credit 4,017.7 3,993.8 3,466.7 0.6 15.9
Domestic Liquidity (M3)Domestic Liquidity (M3)
22
and other banks, while their foreign assets decreased due
to the decline in loan receivables.
Following the rise in M3, M4, a broader concept of
domestic liquidity which comprises M3 and foreign
currency deposits of residents, grew by 10.5 percent y-o-y
in March 2013 from 8.5 percent in December 2012.
Domestic Interest Rates
The average 91-day, 182-day and 364-day Treasury bill
(T-bill) rates in the primary market decreased markedly in
the first quarter by 29 basis points (bps), 38 bps and
13 bps, respectively, due to strong investor demand for
government securities (GS) given the country’s sound
macroeconomic fundamentals. In addition, the high level
of liquidity in the financial system likewise supported the
decline in T-bill rates.
Similarly, secondary market yields of GS for all maturities
declined as of end-March 2013 compared to their
end-December 2012 rates, supported by positive investor
sentiments, low inflation environment and ample market
liquidity. The reductions in the Special Deposit Account
(SDA) rate in January and March as well as the country’s
upgrade to investment grade rating by Fitch Ratings, also
contributed to the decline in interest rates in the
secondary market. Rates declined by a range of 8 bps
(3-month) to 215 bps (20-year).
Yield of short-term secondary T-bills
falls
Domestic market interest rates
decline
Yield Curve for Government SecuritiesYield Curve for Government Securitiesin percent
0
1
2
3
4
5
6
7
3 mo 6 mo 1 yr 2 yr 3 yr 4 yr 5 yr 7 yr 10 yr 20 yr 25 yr
Q1 2012 Q2 2012 Q3 2012
Q4 2012 Q1 2013
23
Consistent with the trend in interest rates of GS, market
interest rates decreased during the review quarter. Time
deposit rates, Manila reference rates, bank lending rates,
and savings deposit rates declined by 56 bps, 44 bps,
40 bps, and 15 bps, respectively.
The Monetary Board (MB) kept the BSP’s key policy rates
at 3.50 percent for the overnight borrowing or reverse
repurchase (RRP) facility and 5.50 percent for the
overnight lending or repurchase (RP) facility during its
policy meetings in the first quarter. However, the MB
decided to cut SDA rate by a cumulative total of 100 bps
across all tenors as part of the BSP’s efforts to rationalize
the SDA. The MB’s decision to maintain the policy rates
was based on its assessment that inflation environment
continues to be benign and inflation expectations are
firmly anchored. Meanwhile, the MB noted that the
reduction in the SDA rate is consistent with the BSP’s
continuing efforts to fine-tune the operations of its
monetary policy tools.
The differentials between domestic and United States
(US) interest rates, gross and net of tax, continued to
narrow in the review period relative to the previous
quarter. The larger decline in the domestic interest rate
relative to the foreign interest rates led to a negative after
tax differential between the RP 91-day T-bill rate and the
US 90-day T-bill rate and a wider negative after-tax
differential between the RP 91-day T-bill rate and the US
90-day London Interbank Offered Rate (LIBOR). The
average 91-day RP T-bill rate went down by 26 bps from
24
the previous quarter, while the average US 90-day T-bill
rate and US 90-day LIBOR decreased by 5 bps and 3 bps,
respectively. The decline in US interest rates was driven
largely by the release of favorable economic reports
during the quarter, such as the higher US manufacturing
data in February 2013, unemployment rate which fell to
its lowest in February 2013 since December 2008, the
lower-than-expected US trade deficit, and the increase in
factory orders to 3.0 percent in February 2013 from
1.9 percent in January 2013. The 1 February 2013 US Fed
announcement to continue its bond-buying program and
keep its policy rate at near zero until the unemployment
rate falls to 6.5 percent also contributed to the further
decline in the US interest rates.
The positive differential between the BSP's policy interest
rate (overnight borrowing or RRP rate) and the US federal
funds target rate was unchanged at 325 bps as of
end-March 2013, as the policy settings for both central
banks were kept steady. Adjusted for the risk premium,
the spread between the two policy rates declined further
to 216 bps in end-March 2013 from 232 bps in
end-December 2012. This development may be traced to
the 16-bp rise in the risk premium given the
0.21 percentage point (ppt) increase in the 10-year RP
yield relative to the 0.05 ppt rise in the 10-year US yield.
Interest rate differentials remain
unchanged
25
Monetary Policy Developments
During its policy meetings on 24 January and 14 March
2013, the BSP decided to maintain its key policy interest
rates at 3.50 percent for the overnight borrowing or RRP
facility and 5.50 percent for the overnight lending or RP
facility. The interest rate on the BSP RRP was also set to
3.50 percent regardless of tenor. The reserve requirement
ratios were kept steady as well.
The MB’s policy rate decisions were based on its
assessment that the inflation environment over the policy
horizon was likely to remain manageable. Latest baseline
forecasts continued to track the lower half of the
4 ± 1 percent target range for 2013 and 2014. Inflation
expectations also continued to be firmly anchored.
Furthermore, the risks to the inflation outlook were
deemed to be evenly balanced. Although global economic
activity has gained traction, lingering fiscal and financial
market stresses in the advanced economies continued to
dampen the broad outlook, thereby mitigating upward
pressures on commodity prices. Meanwhile, pending
domestic power rate adjustments and potentially stronger
domestic liquidity growth due to expectations of steady
foreign capital inflows posed the upside risks to the
inflation outlook.
Meanwhile, the BSP reduced the interest rates on the SDA
facility by 50 bps each during its policy meetings in
January and March 2013. By end-March 2013, the SDA
BSP maintains key policy rates
BSP reduces SDA rates
26
rate was set at 2.5 percent regardless of tenor. Previously,
the SDA is priced at a premium over the overnight RRP.
The reduction in the SDA rates is consistent with the BSP’s
efforts to fine-tune the operations of its monetary policy
tools to enhance their effectiveness in promoting price
and financial stability as well as to align them with
international central banking practice. Amid manageable
liquidity growth and a benign inflation environment, the
operational refinement in the SDA facility was expected to
enhance the ability of the BSP to ensure that liquidity
remains in line with funding requirements of the economy
amid the continued inflow of foreign exchange (FX) to the
economy.
D. Financial Sector
The Philippine banking system remained resilient amid
the lackluster global environment. Banks’ core balance
sheets were marked by a steady growth in assets, deposit
base and capital accounts. Asset quality continued to
improve and capital adequacy ratios remained at par with
international standards.
The banking system remains resilient
27
Performance of the Banking System
Market Size
The number of banking institutions (head offices) fell to
696 as of end-December 2012 from the quarter- and year-
ago levels of 705 and 726, respectively, indicating
continued consolidation of banks as well as the exit of
weaker players in the banking system (Table 7). By
banking classification, banks (head offices) consisted of
37 universal and commercial banks (U/KBs), 70 thrift
banks (TBs), and 589 rural banks (RBs). Meanwhile, the
operating network (including branches) of the banking
system increased to 9,410 in Q4 2012 from 9,301 in
Q3 2012 and 9,050 during the same period last year, due
mainly to the increase in the branches/agencies of U/KBs.
The total resources of the banking system rose by
9.3 percent to P8.4 trillion as of end-December 2012 from
the quarter- and year-ago levels of P7.9 trillion and
P7.6 trillion, respectively (Table 8). The increase could be
traced to the growth in loans, securities and other
equities indicative of the public’s continued trust in the
banking system. U/KBs accounted for nearly 90.0 percent
of the total resources of the banking system.
Number of banks declines but
operating network continues to expand
28
Savings Mobilization
Savings and time deposits remained the primary sources
of funds for banks. Banks’ total deposits3 as of end-March
2013 amounted to P4.5 trillion, 13.4 percent higher than
the year-ago level of P4.0 trillion. The continued growth in
deposits reflected depositors’ sustained confidence in the
banking system. Savings deposits registered a
14.9 percent growth and continued to account for nearly
half of the funding base of banks. Meanwhile, demand
deposits expanded y-o-y by 12.1 percent and time
deposits increased by 11.6 percent from the level posted
a year ago.
Bank Lending Operations
Outstanding loans of commercial banks, net of banks' RRP
placements with the BSP as of end-December 2012, grew
by 14.2 percent y-o-y but declined by 0.8 percent
compared to the level in the previous quarter. Likewise,
outstanding loans of commercial banks, inclusive of RRPs,
expanded by 14.7 percent and 0.1 percent y-o-y and
q-o-q, respectively. Commercial banks' loans continued to
grow steadily at double-digit growth rates since January
2011. Robust credit expansion supported the domestic
economy in the midst of subdued global growth.
Loans for production activities, which comprised more
than four-fifths of commercial banks’ total loan portfolio,
3 This refers to the total peso-denominated deposits of the banking system.
Bank lending continues to grow
Deposit Liabilities of BanksDeposit Liabilities of Banksin billion pesos
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar
Demand Savings Time
2010 2011 2012 2013
Loans Outstanding of Commercial Banks (Gross of Loans Outstanding of Commercial Banks (Gross of RRPsRRPs))in trillion pesos
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q12010 2011 2012 2013
Savings and time deposits continue
to increase
29
posted a 14.2 percent growth. However, the expansion
was lower than the 19.3 percent y-o-y growth registered
during the same period last year. The growth of
production loans was driven mainly by increased lending
to mining and quarrying (48.6 percent); construction
(48.5 percent); health and social work (39.2 percent);
financial intermediation (28.8 percent); and real estate
renting and business services (25.2 percent). Similarly, the
growth in consumer loans also increased to 10.8 percent,
reflecting the rapid rise in lending across all types of
consumer loans.
Credit Card Receivables
The combined credit card receivables (CCRs) of U/KBs and
TBs as of end-June 2012, inclusive of credit card
subsidiaries, rose by nearly 13.0 percent to P136.6 billion
relative to last year’s level, further boosting the growth in
household consumption. CCRs also went up by
3.6 percent compared to the level at the end of the
previous quarter. Meanwhile, the ratio of CCRs to the
total loan portfolio (TLP) slightly dipped to 3.7 percent
from 3.8 percent compared to the previous quarter. The
non-performing CCRs of U/KBs and TBs, inclusive of credit
card subsidiaries, increased by 3.1 percent to P15.1 billion
from last quarter’s P14.6 billion. As to loan quality, the
ratio of non-performing CCRs to total CCRs slightly
decreased to 11.0 percent from the previous quarter’s
11.1 percent, as the growth in non-performing CCRs was
outpaced by the total increment in CCRs. Nevertheless,
Credit card receivables continue to
increase
30
this quarter’s delinquency ratio was still better than the
12.8 percent recorded a year ago.
Auto Loans
The combined auto loans (ALs) of U/KBs and TBs, inclusive
of non-bank subsidiaries, increased by 4.0 percent to
P150.3 billion as of end-June 2012 from the previous
quarter’s P144.8 billion and by 17.2 percent from
P128.2 billion a year ago. Consumers’ continued
confidence in the economy as well as the aggressive
marketing strategies of banks and other car financing
firms sustained the rise in automobile purchases. The
proportion of total ALs to TLP, exclusive of interbank loans
(IBL), was slightly lower at 4.1 percent than previous
quarter’s ratio of 4.2 percent. In terms of loan quality,
ratios of non-performing ALs to total ALs increased slightly
to 4.4 percent from the previous quarter’s 4.3 percent
while the non-performing ALs to TLP remained unchanged
at 0.2 percent.
Residential Real Estate Loans
As of end-June 2012, the combined residential real estate
loans (RRELs) of U/KBs and TBs rose by 5.1 percent to
P244.4 billion from the previous quarter’s P232.6 billion,
and 23.2 percent higher than the previous year's
P198.4 billion. The continued bullishness in the real estate
market as indicated by the increase in the number of
projects unveiled by real estate developers as well as
Consumers’ continued confidence in the
economy helps sustain demand for
automobiles
Continued bullishness in the property
market supports real estate purchases
31
banks’ intensified promotional campaigns in terms of
offering lower interest rates, supported more real estate
purchases during the review period. The ratio of RRELs to
TLP remained steady at about 6.7 percent q-o-q. By
industry, U/KBs held a bigger slice of the total residential
real estate exposure at 57.4 percent (P140.3 billion) while
TBs accounted for the remaining 42.6 percent
(P104.1 billion). In terms of loan quality, the ratio of non-
performing RRELs to total RRELs of U/KBs and TBs eased
to 4.0 percent from the previous quarter’s 4.2 percent
and was better than the year ago’s 5.1 percent ratio.
Asset Quality and Capital Adequacy
The banking system’s asset quality, as measured by the
non-performing loans (NPL) ratio, sustained its downward
path, easing to 2.5 percent as of end-December 2012
from 2.8 percent in the comparable period in 2011 (Table
9). Banks’ initiatives to improve asset quality along with
prudent lending regulations helped bring the NPL ratio to
below its pre-Asian crisis level of around 3.5 percent. The
low NPL ratio reflected the 1.2 percent decline in the level
of NPLs combined with the 12.5 percent expansion in the
banking industry’s TLP. The NPL level dropped to
P104.9 billion at end-December 2012 from P106.2 billion
during the same period in 2011, while TLP expanded to
P4.2 trillion from P3.7 trillion during the same period last
year.
Asset quality continues to improve as NPL
ratio eases
Ratio of NonRatio of Non--Performing Loans to Total Loans of the Banking SystemPerforming Loans to Total Loans of the Banking Systemin percent
2.5
2.7
2.9
3.1
3.3
3.5
3.7
3.9
4.1
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec2010 2011 2012
32
Nonetheless, the Philippine banking system’s NPL ratio of
2.5 percent is higher compared to Indonesia’s 1.8 percent,
Malaysia’s 2.0 percent, South Korea’s 0.5 percent and
Thailand’s 2.2 percent.4 The lower NPL ratios of Malaysia
and South Korea were attributed to the creation of
publicly-owned asset management companies (AMCs) in
these countries, which purchased the bulk of their NPLs, a
practice not resorted in the Philippines.
The loan exposures of banks remained adequately
covered as the banking system’s NPL coverage ratio
improved to 113.0 percent as of end-December 2012
from 103.7 percent in the preceding year. The ratio was
indicative of banks’ continued compliance with the loan-
loss provisioning requirements of the BSP to ensure
adequate buffers against unexpected losses.
As of end-September 2012, the U/KB’s average capital
adequacy ratio (CAR) stood at 18.0 percent and
19.0 percent on solo and consolidated bases, which were
both higher than last year’s 16.4 percent and 17.4
percent, respectively.
The industry raised its capital to support an increase in
assumed risks. Banks either retained earnings or issued
capital instruments to match the rise in their risk-
weighted assets (RWAs). RWAs rose due to the expansion
of trading book positions.
4
Sources: Various central bank websites, IMF and financial stability reports, Indonesia (commercial banks, Q4 2012); Malaysia (commercial banks,
Q4 2012); Thailand (banking system, Q1 2013); and Korea (banking system, Q4 2011).
Banks remain adequately capitalized
Capital Adequacy Ratio of the Banking SystemCapital Adequacy Ratio of the Banking Systemin percent
15.0
15.5
16.0
16.5
17.0
17.5
18.0
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
2009 2010 2011
33
The Philippine banking system’s CAR on a consolidated
basis at 17.6 percent was the same with Malaysia and
higher than those of Indonesia (17.3 percent), Thailand
(15.8 percent), and South Korea (14.0 percent).5
Banking Policies
Banking policies implemented during the quarter were
aimed at strengthening regulations and guidelines on:
1) single borrower's loan (SBL) limit; 2) minimum capital
and disclosure requirements in accordance with the Basel
III standards; 3) amendment to the regulations on
individual and aggregate ceilings on loans, other credit
accommodations and guarantees to directors, officers,
stockholders and their related interests (DOSRI);
4) required disclosures in the published balance sheet;
and 5) macro-prudential measure for handling non-
deliverable forwards involving the Philippine peso
(Annex A).
Capital Market Reforms
Capital market policy reforms continued to gain ground
during the period as the BSP and the private sector
adopted measures to develop further the Philippine
capital market. During the quarter, the reforms focused
more on promoting investor confidence, enhancing
transparency and corporate governance as well as
expanding products and markets (Annex B).
5 Sources: Various central bank websites, IMF and financial stability reports, Indonesia (commercial banks, Q4 2012); Thailand (banking system Q1 2013);
Malaysia (commercial banks, Q4 2012); and Korea (banking system, Q4 2011). Meanwhile, the Philippine banking system’s CAR is as of end-December
2011.
BSP continues to collaborate with
government agencies and private
sector in developing the capital
market
Banking policies implemented aim to
strengthen and enhance existing
regulations
34
Stock Market
During the period January to March 2013, the local stock
market was bullish, with the Philippine Stock Exchange
index (PSEi) rising by 15.9 percent q-o-q or by
33.5 percent y-o-y to average 6,434.0 index points.
Twenty-four fresh new highs were posted in the first
three months of the year, as the index passed the 6,200,
6,700 and 7,100 marks in January, February and March,
respectively. The index closed the period at 7,071.0 index
points, higher year-to-date by 17.8 percent.
Investors were bullish during the quarter, amidst
optimism over the outlook for Philippine economy,
market liquidity arising from two downward adjustments
made by the BSP in the SDA rate and expectations of a
credit rating upgrade. This upgrade materialized when
Fitch Rating raised the country’s rating to investment
grade status (BBB-) on 27 March 2013. Overseas, signs of
the US recovery strengthening and the more aggressive
monetary easing by the Bank of Japan also helped
improve demand for local shares. However, partly
tempering investors’ risk appetite were profit-taking
amidst growing concern that local valuations are too
expensive and renewed worries over the euro zone debt
crisis following the Cyprus banking crisis.
Mirroring the rally in the 30-stock composite index, total
stock market capitalization went up by 15.1 percent q-o-q
or by 28.3 percent y-o-y to reach P12.6 trillion in end-
Upbeat outlook for the Philippine
economy and credit rating upgrade
boost local bourse
Average PSEi*/
in index points
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q 3 Q4 Q1 Q2 Q3 Q4 Q1
2006 2007 2008 2009
*/ Average of the monthly closing index during the quarter
2010 2011 2012 2013
Stock market indicators reflect
generally bullish investor sentiments
35
March 2013. Daily value turnover similarly jumped by
29.9 percent relative to the previous quarter and by
30.3 percent from year-ago level to average P10.2 billion
during the quarter-in-review. Foreign investors’ optimism
over the outlook for local shares was also reflected in
their net foreign purchases amounting to P39.9 billion
from January thru March 2013, accounting for
49.8 percent of total transactions. Moreover, the
price-earnings ratio of listed issues continued to rise from
an average of 17.9 times in the last quarter of 2012 to
20.5 times in first three months of 2013, making
Philippine stocks one of the most expensive in the region.
Most stock markets in the region similarly advanced
during the quarter in review. Of the seven Asian-Pacific
national stock indices monitored, six rallied relative to the
previous quarter. The rally was led by the Philippines,
which rose by 15.8 percent q-o-q. This was followed by
Thailand (14.0 percent), China (11.7 percent), Indonesia
(6.9 percent), Singapore (6.4 percent) and Hong Kong
(5.8 percent). Only Malaysia posted a slight decline of
0.1 percent q-o-q due to pre-election jitters amidst
speculation that the impending polls will weaken the
ruling coalition’s grip on power.
Most stock markets in the region also
increase
Selected Asian Stock indicesSelected Asian Stock indicesin index points
0
2,0004,000
6,000
8,00010,000
12,000
14,000
16,00018,000
20,000
22,000
24,000
Indonesi
a
Singa
pore
Philippin
es
Hong
Kong
China
Mala
ysia
Thaila
nd
Q1 2012
Q4 2012
Q1 2013
36
Local Currency Bond Market
Size and Composition6
Local currency (LCY) bonds issued by both public and
private sectors amounted to P169.7 billion in the first
quarter of 2013, declining by 51.5 percent from the
P350.3 billion registered in the same period in 2012 and
down by 44.5 percent from the P305.7 billion posted in
the previous quarter.
Public sector issuances aggregated P154.0 billion,
declining by 46.8 percent than the previous quarter’s level
on the absence of Retail Treasury bond (RTBs) and
benchmark bond issuances. There was also no issuance
from government owned and controlled corporations
(GOCCs) during the period.
The private sector likewise decreased its issuance of LCY
bonds to P15.8 billion, a 2.9 percent decline from 4Q 2012
and a 42.7 percent drop on a y-o-y basis. Private
corporates opted to source some of its financing needs
from the international debt markets, taking advantage of
the low interest rate environment.
In terms of market share, the public sector comprised
91.0 percent of total bond issuances during the quarter
while the private sector accounted for the remaining
9.0 percent.
6 This refers to the peso-denominated bond issuances by both public and private sectors. Public sector issuances of LCY bonds include issuances in the
primary market and rollovers of maturing series which were issued by the BTr and GOCCs. This excludes issuances by the central bank.
Both public and private sectors issue
fewer LCY bonds
91%
9%
Local Currency Bond Issuances
(Jan -Mar 2013)
Public
Private
37
Bonds issued by the BTr accounted for the bulk of total
public issuances which were mostly in the form of Fixed-
Rate T-bonds and T-bills.
Meanwhile, issuances from the private sector consisted
largely of bonds and notes and certificates of deposits
with issuances accounted for mostly by firms in the real
estate sector.
Primary Market 7
The Bureau of the Treasury revised its schedule of
offerings during the quarter. Primary auctions for both
T-bills and T-bonds were reduced to once every month
from its previous bi-monthly schedule. However, offer
volumes were increased to P120.0 billion from the
P90.0 billion programmed in the previous quarter.
With the decision to hold fewer auctions and the ample
liquidity in the system, demand for T-bills and T-bonds
significantly climbed with investors tendering 3-6 times
more than that of the NG’s programmed borrowings for
both short- and long-dated securities. Total amount of
tenders reached P431.2 billion against NG’s offerings of
P120.0 billion.
The NG awarded in full its programmed borrowings for
T-bonds and even exceeded its award for T-bills by
7
The discussion includes primary market for government issuances only.
Ample liquidity in the system sustains
demand for T-bills and T-bonds
2013 Offerings Tenders Accepted Rejected Bids Bids
First Quarter 120.0 431.2 120.8 310.4T-bills 45.0 135.6 45.8 89.8
T-bonds 75.0 295.6 75.0 220.6
38
P800.0 million. The NG accepted P120.8 billion worth of
T-bills and T-bonds (against the programmed
P120.0 billion) while rejecting P310.4 billion bids to keep
the NG’s debt servicing costs manageable.
Investors were also seen preferring shorter dated T-bills
as yields for the 91- and 182-day securities fell more than
that of the 364-day debt instrument, declining to historic
lows of below 1 percent during the quarter. Expectations
that inflation will remain low alongside the ample liquidity
conditions from continued surge in capital flows from the
external market contributed in keeping rates at historic
low. There was also preference for longer dated T-bonds
as investors took advantage of the relatively high yields
offered by these bonds. Tenders for the 20-year bonds
were almost 5 times oversubscribed as compared to the
7-year bond with subscriptions at 3 times the offer
amount.
Secondary Market
The government’s decision to hold fewer auctions in the
first quarter likewise spurred investors to buy in the
secondary market. Trading of both government and
private corporate bonds rose to P2,906.8 billion, or up by
73.2 percent, q-o-q, and 40.0 percent on y-o-y basis.
The continued favorable macroeconomic environment in
the Philippines and the first investment grade rating
received from Fitch buoyed trading sentiment over the
Trading of both government and
corporate bonds at the secondary
market remains robust
-
500
1,000
1,500
2,000
2,500
3,000
3,500
1Q
20
05
3Q
20
05
1Q
20
06
3Q
20
06
1Q
20
07
3Q
20
07
1Q
20
08
3Q
20
08
1Q
20
09
3Q
20
09
1Q
20
10
3Q
20
10
1Q
20
11
3Q
20
11
1Q
20
12
3Q
20
12
1Q
20
13
Secondary Market Volume (In billion pesos)
Preference for shorter dated T-bills and
longer dated T-bonds keeps rates at
historic lows
39
country’s debt papers. The low interest rate environment
in the external market, with the US and Japan signaling
the use of more quantitative easing measures in the near
term, also prompted buying at the secondary market. The
cut in the BSP’s SDA rate in January and March likewise
contributed in the rise of trading volume at the fixed
income market as investors searched for alternative
investment instruments.
Foreign Currency Bond Market
The NG opted to refrain from borrowing in the
international debt market in the first quarter of 2013. The
preference was to source funds from domestic
borrowings, taking advantage of the ample liquidity in the
local capital market. The NG’s plan for 2013 is to source
20.0 percent of the government’s funding needs from
overseas lenders while the remaining 80.0 percent, from
local investors.
For the private sector, the Philippine oil refiner and
retailer Petron Corporation raised US$750.0 million from
the issuance of perpetual subordinated bonds in January
and March 2013. Both issuances were oversubscribed
with the proceeds to be used for capital expenditures.
Credit Risk Assessment
The Philippines secured its first investment grade rating
on 27 March 2013. Fitch Ratings upgraded the Philippines’
The NG refrains from borrowing offshore,
taking advantage of the ample liquidity
in the domestic capital market
The Philippines secures investment
grade rating
40
Long-Term Foreign Currency Issuer Default Rating (IDR) to
‘BBB-‘ from ‘BB+’. The Long-Term Local-Currency IDR has
been upgraded to ‘BBB’ from ‘BBB-‘. The outlook on both
ratings is stable. The agency has also upgraded the
Country Ceiling to ‘BBB’ from ‘BBB-‘ and the Short-Term
Foreign-Currency IDR to ‘F3’ from ‘B’.
The credit upgrade of the Philippines’ sovereign ratings
was due to the following factors: (1) The Philippines’
sovereign external balance sheet is considered strong
relative to ‘A’ range peers, let alone ‘BB’ and ‘BBB’
category medians; (2) The Philippine economy has been
resilient, expanding 6.6 percent in 2012 amid a weak
global economic backdrop; (3) Strong domestic demand
drove this outturn and improvements in fiscal
management have made general government debt
dynamics more resilient to shocks; (4) Strong economic
growth and moderate budget deficit have brought the
general government (GG) debt/GDP ratio in line with the
‘BBB’ median; (5) The sovereign has taken advantage of
generally favorable funding conditions to lengthen the
average maturity of GG debt to 10.7 years by end-2012
from 6.6 years at end-2008; (6) The foreign currency share
of GG debt has fallen to 47.0 percent from 3.0 percent
over the same period; favorable macroeconomic outturns
have been supported in Fitch’s view by a strong policy-
making framework; (7) The BSP’s inflation management
track record and proactive use of macro-prudential
measures to limit the potential emergence of
macroeconomic and financial imbalances; and (8) Inflation
Rating
Agency
Local
Currency
LT/ST
Foreign
Currency
LT/ST
Outlook
S&P BBB-/A3 BBB-/A3 Stable*
Moody’s Ba1/n.a. Ba1/n.a. Stable
Fitch BBB/n.a. BBB-/F3 Stable
Source: Reuters
*On 2 May 2013, S&P revised its ratings outlook for the Philippines to positive from stable
Philippine Sovereign Credit Ratings
as of March 2013
41
has been in line with ‘BBB‘ peers on average over the past
five years; governance standards, as measured in
international indices such as the World Bank’s (WB)
framework, remain weaker than ‘BBB’ range norms but
are not inconsistent with a ‘BBB-‘ rating as a number of
sovereigns in this rating category fare worse than the
Philippines; the country’s average income is low
(US$2,600.0 versus ‘BBB’ range median of US$10,300.0 in
2012), although this measure does not account directly
for the significant support to living standards from
remittance inflows; the country’s low fiscal revenue take
of 18.3 percent of GDP in 2012, compared with a ‘BBB’
range median of 32.3 percent. This limits the fiscal scope
to achieve the government’s passion of raising public
investment. The recent introduction of a “sin tax”, against
stiff political opposition, will likely lead to some increment
in revenues.
Meanwhile, on 2 May 2013, the Philippines received
another boost in credit rating from Standard and Poor’s
(S&P). The ratings on the Philippines was lifted to
‘BBB-/A-3’ from ‘BB+B’ with a stable outlook. The S&P,
just like Fitch Ratings, attributed the upgrade to the
country’s improved fiscal profile, declining reliance on
foreign currency debt, increased revenue collection, and
macroeconomic stability, among other factors.
42
Sovereign Spreads
The country’s debt spreads exhibited mixed trend in the
first quarter of 2013. The Emerging Markets Bond Index
(EMBI)+Philippine spreads, or the extra yield investors
demand to hold Philippine debt securities over US
Treasuries, widened to 136 bps from the previous
quarter’s average of 122 bps. On the other hand, the
credit default swap (CDS) spread, or the cost of insuring
the country’s 5-year sovereign bonds against default, was
almost stable to average 102 bps during the quarter. The
country’s CDS spreads also dropped below 100 bps to its
year’s low of 93.5 bps on 8 March 2013. Against those of
neighboring economies, the Philippine CDS traded lower
than Indonesia’s average of 140 bps and traded closer to
Thailand’s 92 bps and Malaysia’s 82 bps.
Debt spreads started the year on a narrowing trend as a
result of a deal that postponed the fiscal cliff issue in the
US for a few weeks, prompting markets to continue
buying emerging market bonds. More signs of global
economic recovery, with China reporting stronger-than-
expected December export growth, and the continued
inflow of capital into Asian financial markets also
supported the narrowing of spreads in the first weeks of
the year.
However, debt spreads started to widen by mid-January
on concerns over potential rise in prices emanating from
Japan’s plan to target 2.0 percent inflation and its ongoing
Debt spreads exhibit mixed trends
Emerging Markets Bond Index (EMBI) Spread
in basis points
0
100
200
300
400
500
EMBI+ Philippines
EMBI+Global
Emerging Markets Bond Index (EMBI) Spread
in basis points
0
50
100
150
200
250
300
350
CDS Philippines CDS Indonesia
CDS Thailand CDS Malaysia
43
asset purchase program. Widening pressures continued in
February on concerns over hot money flows towards the
Asian region. Lukewarm demand for fixed income
securities was observed as investors were seen preferring
the equities market which drove bond yields up and
widened spreads, respectively. Concerns over the
electoral impasse in Italy also expanded debt spreads as
Moody’s warned of contagion if a new government is not
formed quickly.
Towards the end of February, widening pressures abated
due to reports of better US home and consumer
confidence data. The unexpectedly strong US non-farm
payrolls and the subsequent decline in their
unemployment rate contributed in the easing of debt
spreads. The improving macroeconomic environment in
the world’s biggest economy translated into an increase in
US Treasury yields with US 10-year bonds breaching the
2.0 percent level. This boosted a “risk-on” trading of
bonds like ROPs, which, in turn, led to a decline in the
country’s bond yields and tightening in debt spreads.
The trend was not sustained as spreads started to climb
once again beginning mid March and continued towards
the end of the quarter. Cyprus bailout plans raised fears
that it could generate a contagion that would spread to
peripheral economies. Widening pressures continued
towards the rest of the month as the unfolding Cyprus
debt crisis re-ignited concerns about the region’s weak
44
banks, escalating concerns of Cyprus becoming the first
country to exit the euro zone.
At the domestic front, the reported increase in the
country’s budget deficit of P19.5 billion in 2012 versus the
previous year’s gap of P15.9 billion likewise added to the
expansion in debt spreads. Meanwhile, the credit rating
upgrade received from Fitch on 27 March did not
translate into a significant tightening of Philippine debt
spreads. This reflected that expectations for a rating
upgrade have already been priced-in by market
participants, limiting the scope for further gains.
Payments and Settlements System
In Q1 2013, the total volume of transactions that were
settled and processed in the Philippine Payments and
Settlements System (PhilPaSS) increased by 2.3 percent to
337,452 from the previous quarter’s level of 329,815. The
growth in the volume of transactions was due to the q-o-q
increase in the following: sales and purchases of
government securities via delivery-versus-payment (DvP)
(94.7 percent); tertiary transactions on GS via expanded
delivery-versus-payment (eDvP) (81.0 percent); and BSP
Cash Department transactions (35.7 percent).
Despite the growth in the total volume of transactions,
the total value of transactions recorded a q-o-q decline of
0.9 percent to P97.4 trillion. The decrease in the total
transaction value was due to the decline in the following
PhilPaSS transactions increase
PhilPass Transactions
2013 2012Growth Rates
(in %)
Q1 Q4 Q1 Q-o-Q Y-o-Y
Volume 337,452 329,815 344,491 2.3 -2.0
Value
(in trillion PhP)97.4 98.4 78.4 -0.9 24.3
Transaction Fees
(in million PhP)41.1 37.2 46.0 10.6 -10.7
Source: Payments and Settlements Office, Bangko Sentral ng Pilipinas
45
accounts: BSP Department of Loans and Credit
transactions (-78.6 percent); Electronic Cash Withdrawal
System (ECWS) transactions (-44.1 percent); Philippine
Clearing House Corporation (PCHC) transactions
(-10.7 percent); and BSP Treasury Department
transactions (-7.4 percent).
On a y-o-y basis, the value of transactions grew by
24.3 percent while the volume of transactions decreased
by 2.0 percent.
As a result of the increase in the volume of PhilPaSS
transactions in Q1 2013, the total revenues derived from
PhilPaSS operations reached P41.1 million, 10.6 percent
higher than the P37.2 million attained in the fourth
quarter of 2012. However, on a y-o-y basis, total revenues
decreased by 10.7 percent.
E. External Sector
Balance of Payments
The country’s balance of payments position yielded a
higher surplus in Q1 2013 at US$1.5 billion (equivalent to
2.4 percent of the country’s GDP compared to the
US$1.2 billion surplus in the comparable period a year
ago. The 23.5 percent improvement in the country’s
external payments position was underpinned by the
robust performance of the current account, particularly
the higher surplus in the services and secondary income
BOP position registers a higher surplus
Balance of Payments ( in million US$)
Growth
2013 2012 Rate (%)
Current Account 3439 393 775.1
Capital Account 23 25 -8.0
Financial Account -1489 -4821 69.1
Net Unclassified Items -3416 -3996 14.5
Overall BOP 1535 1243 23.5
Q1
46
accounts as well as the lower deficit in the goods and
primary income accounts.8 Meanwhile, the financial
account recorded lower net borrowings by residents from
the rest of world on account mainly of the higher net
repayment of liabilities in the other investment account
combined with the decline in the net incurrence of
liabilities in the direct investment account.
Current Account. The current account recorded a surplus
of US$3.4 billion (equivalent to 5.3 percent of GDP) in
Q1 2013, rising by more than eightfold compared to the
US$393 million surplus in the same period a year ago. This
appreciable uptrend was mainly due to higher net
receipts in the secondary income and services accounts,
combined with the reduced deficit in trade-in-goods and
the lower net payments of primary income.
Trade-in-Goods. The trade-in-goods deficit in Q1 2013
narrowed by 42.9 percent to US$2.7 billion compared to
the US$4.8 billion deficit registered in the same quarter a
year ago. The continued improvement in the trade-in-
goods deficit was a result of the 7.9 percent expansion in
goods exports and the contraction in goods imports by
8.2 percent. The growth in exports of goods was sustained
by strengthening external demand in the country’s major
trading partners, following encouraging signs of economic
recovery in the US and Japan and the fairly robust growth
in emerging countries.
8 Primary Income account (formerly the Income account) shows flows for the use of labor and financial resources between resident and non-resident
institutional units. Secondary Income account (formerly the Current Transfers account) shows current transfers, in cash or in kind for nothing in return,
between residents and non-residents.
Current account surplus rises
Trade-in-goods deficit narrows
considerably
47
Exports of Goods. Exports of goods continued to rebound
in Q1 2013, with export receipts reaching US$11.2 billion
compared to US$10.3 billion in the same quarter in 2012
(Table 2.1).9 The favorable outcome in the country’s
export performance was driven by improved external
demand for Philippine-made products from the country’s
major export markets, particularly Japan, South Korea, the
Netherlands, and the United Kingdom (UK). The
7.9 percent improvement in export performance was
attributed mainly to higher shipments across all major
commodity groups as follows:
� Manufactured products exports expanded by
5.1 percent to reach US$9.3 billion compared to
US$8.8 billion in the same quarter a year ago on
account of the upward trends in the following
commodities:
o Wood manufactures exports, amounting to
US$699.0 million, climbed by 49.4 percent due to
increased demand from Japan for builder’s joinery
and carpentry of wood, including French windows,
wooden frames for paintings, photographs and
mirrors, cases, boxes and crates, doors and
frames, other parquet panels, and tableware and
kitchenware of wood. This can be attributed to the
continuing reconstruction efforts in Japan. The
other major export markets for these wood
9 Based on BPM6 concept (excluding from the National Statistics Office (NSO) foreign trade statistics those goods that did not involve change in
ownership), e.g., consigned goods are deducted, in addition to the exclusion of returned/replacement goods, and temporarily imported goods. For
example, of the total electronics exports, 17 percent are on consignment basis.
Exports of goods continue to pick up
pace
Coconut3.9%
Other agro-based2.4%
M ineral products
4.7% Electronics40.3%
Garments3.4%M achinery
9.1%
Fruits & vegetables
3.1%
Others31.6%
Petro leum1.6%
Expo rts by M ajo r C o mmo dity Gro up Q1 2013
(P ercent Share)
Source: National Statistics Office (NSO)
48
products were the US, Germany and the
Netherlands.
o Processed food and beverages exports grew by
60.2 percent to US$527.0 million compared to
US$329.0 million a year ago, in view of higher
shipments of frozen fish fillets, powdered filled
milk, chewing gum, tuna in airtight containers and
frozen poultry mostly to countries in Asia, Europe,
and the US.
o Exports of chemicals recorded an increment of
72.6 percent to US$751.0 million owing to
increased demand from China for mixtures of
chemicals used in the manufacture of foodstuff,
artificial and prepared waxes, and other sulphides.
o Other manufactured products likewise registered
uptrend, including baby carriages, toys, games &
sporting goods (by 44.2 percent), iron & steel
(by 10.6 percent), furniture and fixtures
(by 31.6 percent), non-metallic mineral
manufactures (by 9.8 percent), and miscellaneous
manufactured articles (by 4.1 percent).
� Coconut products exports increased by 32.0 percent
to US$433.0 million due to the 32.2 percent increase
in sales of coconut oil on account of higher export
volume. Shipments of copra meal/cake posted a
considerable increase (by 425.0 percent) as a result of
higher export volume and price. The rise in coconut oil
exports since the start of the year was attributed to
higher domestic supply of copra and sustained
49
demand from traditional markets, mainly the US and
Europe, where 80.0 percent of the country’s coconut
oil production is exported.
� Sugar and products exports expanded to
US$109.0 million from US$48.0 million a year ago,
primarily on account of the notable increase in
exports of centrifugal and refined sugar
(by 145.0 percent) and molasses (by 66.7 percent) to
Japan, the US, and South Korea.
� Fruits and vegetables exports rose by 38.1 percent to
US$341.0 million due mainly to the continued strong
demand for bananas (by 83.2 percent). Bananas
remained the top exports in this major commodity
group, garnering more than 60.0 percent of total fruits
and vegetables exports. Improved shipments of
pineapple juice (by 8.3 percent), pineapple
concentrates (by 50.0 percent), and other fruits and
vegetables (by 35.1 percent) also contributed to the
double-digit growth of this commodity group.
� Other agro-based products exports increased by
28.6 percent to US$261.0 million on account largely of
the 13.2 percent growth in shipments of fresh or
preserved fish. Exports of unmanufactured tobacco,
natural rubber and other agro-based products likewise
registered increments during the quarter.
� Forest products exports climbed appreciably
(by 111.1 percent) due to higher world prices of
lumber at US$170.0/cubic meter from US$62.0/cubic
50
meter a year ago due to strong demand from log
buyers in the US, Canada and Asia. Higher shipments
of plywood also contributed to the uptrend in exports
of this commodity group.
� Mineral products exports improved by 6.8 percent to
US$520.0 million from US$487.0 million in the
comparable quarter a year ago due to increased
shipments of iron ore agglomerates (by 62.5 percent)
to leading export markets, namely, Japan, Thailand,
and South Korea.
� Petroleum products exports rose by 41.9 percent to
US$176.0 million, traced to improved shipments of
other fuel oils, naphtha reformates and other mineral
oil following higher demand in Hong Kong and
Malaysia.
By contrast, other manufactured products exports which
registered declines during the quarter in review were as
follows:
o Exports of electronics products (including other
electronics) fell by 11.8 percent to US$4.5 billion
compared to US$5.1 billion last year. Shipments of
electronics comprised about 48.0 percent of total
manufactured products exports during the
quarter. The downtrend was due mainly to the
contraction in shipments of semiconductors
(by 21.8 percent), electronic data processing
(by 75.2 percent) and telecommunication
51
(by 12.5 percent). Other electronics products such
as consumer electronics, communication radar
and medical/industrial instrumentation and other
electronics also registered declines. Meanwhile,
the growth drivers of electronics exports were
office equipment, automotive electronics and
control and instrumentation equipment. The
sluggish performance of semiconductors exports is
consistent with the global sales report of the
Semiconductor Industry Association (SIA) which
showed that year-to-year sales of semiconductors
in the US and Japan declined by 1.5 percent and
18.0 percent, respectively. As a result, total global
year-to-year sales across major markets, including
Europe and Asia Pacific registered only a modest
growth of less than 1.0 percent.10 It should be
noted, however, that the semiconductors’ book-
to-bill ratio has improved to more than unity since
January 2013, averaging at 1.1 in Q1 2013.11
o Exports of machinery and transport equipment
posted a modest decline of 2.7 percent to reach
US$1.0 billion due mainly to decreased shipments
of other unassembled fuel tanks, engine brackets,
parts and accessories of radiators and aluminum
radiators.
o Garments exports fell by less than one percent to
US$383.0 million on account of sluggish demand in
the US for trousers, bib and brace overalls,
10
The Semiconductor Industry Association (SIA) represents the US semiconductor industry, America's top export industry over the last five years and a
bellwether measurement of the state of the US economy. 11
Book-to-bill ratio, which is the ratio of three-month moving average bookings to three-month moving average shipments, normally has a three-month
lag in shipments.
52
breeches and shorts, shirts, dresses of synthetic
fiber, and jerseys, pullovers, cardigans and
waistcoats. The prevailing uncertainties in the
global economy have dampened growth prospects
in key garments suppliers particularly Bangladesh
and India whose major export markets are the US
and Europe.
o Exports of textile yarns/fabrics dropped by
4.4 percent to US$43.0 million due to lower
shipments of woven fabrics and artificial fibers to
export markets in Asia and Europe.
Imports of Goods. Imports of goods declined to
US$13.9 billion in Q1 2013 from the US$15.1 billion level
in the same quarter last year. The 8.2 percent contraction
was due to the lower importation across major
commodity groups, except consumer goods (Table 2).12
Capital goods imports dropped by 7.2 percent to
US$2.7 billion due largely to lower procurement of office
and EDP machines (by 28.1 percent), aircraft, ships &
boats (by 30.3 percent), and professional, scientific,
photographic equipment and optical goods
(by 13.9 percent). The downtrend posted in these
commodities more than offset the higher purchases
recorded in imports of power generating and specialized
machines (by 2.6 percent), telecommunication equipment
and electrical machines (by 2.5 percent), and land
transport equipment (by 3.9 percent).
12
Based on BPM6 concept (excluding from the National Statistics Office (NSO) foreign trade statistics those goods that did not involve change in
ownership), e.g., consigned goods are deducted, in addition to the exclusion of returned/replacement goods, and temporarily imported goods.
Imports of goods decline
Capital Goods19.6 %
Raw M ats.43.5 %
M inerals23.4 %
Consumer Goods13.4 %
Special Transactions
0.1 %
Impo rts by M ajo r C o mmo dity Gro up Q1 2013
(P ercent Share)
Source: National Statistics Office (NSO)
53
Similarly, imports of raw materials and intermediate
goods, aggregating US$5.9 billion, were lower by
2.3 percent, dragged down largely by the decreased
purchases of semi-processed raw materials, particularly
materials and accessories for the manufacture of
electrical equipment and chemicals. Raw materials for
electronics exports which comprised 40.4 percent of semi-
processed raw materials fell moderately by 1.7 percent
during the quarter owing to the uncertainty in the global
environment which affected the recovery of the
electronics industry. Imports of mineral fuels and
lubricants contracted by 17.9 percent to US$3.2 billion,
mainly due to the lower import volume of petroleum
crude even as import price rose during the quarter in
review. The volume of petroleum crude imports in
Q1 2013 declined by 44.1 percent from 24.3 million
barrels in Q1 2012 to 13.6 million barrels in Q1 2013.
Meanwhile, the import price of petroleum crude went up
by 10.0 percent from US$103.3/barrel in Q1 2012 to
US$113.7/barrel in Q1 2013.
Conversely, consumer goods imports registered an
uptrend of 6.9 percent to US$1.5 billion in Q1 2013 due
mainly to the increment in the procurement of both
durable goods (by 11.5 percent) and non-durable goods
(by 2.7 percent). The growth contributors in imports of
durable goods were passenger cars & motorized cycles,
home appliances and miscellaneous manufactures while
those in non-durable goods were other food & live
54
animals chiefly for food, beverages and tobacco
manufacture, and articles of apparel and accessories. The
modest increase in the purchases of non-durable goods
was caused by lower rice importation during the quarter
in review (by 89.3 percent) due mainly to the significant
drop in the import volume of rice (by 96.0 percent) to
only 4 thousand metric tons in Q1 2013 from 101 metric
tons in the same quarter last year. This was in line with
the government’s plan to reduce rice imports, with
prospects of better rice production, following the
program to attain rice sufficiency in 2013.
Trade-in-Services. Net services receipts totaled
US$1.8 billion in the first quarter of 2013, higher than the
US$1.5 billion net receipts posted in the comparable
quarter a year ago. The 18.8 percent increment was due
mainly to increased net receipts registered in
telecommunications, computer, information, travel, and
personal, cultural, and recreational services along with
decreased net payments in transport services (particularly
due to lower outlays for freight as a result of lower
imports of goods), charges for the use of
intellectual property, insurance and pension, financial,
and government goods and services.13 In addition, net
receipts in technical, trade-related, and other business
services, which comprised the bulk of business process
outsourcing (BPO)-related transactions, continued to
13
Based on BPM6, financial services consist of: a) explicitly charged and other financial services; and b) financial intermediation services indirectly
measured (FISIM). FISIM refers to margins between interest payable and reference rate on loans and deposits. Government goods and services
n.i.e. cover goods and services: a) supplied by and to embassies, military bases and international organizations; b) acquired from the host economy by
diplomats, consular staff, and military personnel located abroad and their dependents; and c) services supplied by and to governments and not included
in other categories of services.
Net receipts of services increase
55
boost the performance of the services account, with net
receipts amounting to US$2 billion (Table 3).14 The country
continued to be a global leader in voice services while it
expands into other sectors like software development, IT,
animation and game development, and heath care
information management.
Primary Income. Net payments in the primary income
account of US$103.0 million in Q1 2013 were lower
compared to US$657.0 million recorded in Q1 2012. The
considerable reduction in the net payments in primary
income (by 84.3 percent) stemmed mainly from lower net
outlays in investment income together with higher net
earnings of resident OF workers which rose by 5.7 percent
to reach US$1.6 billion. In particular, net dividends to
foreign direct and portfolio investors declined by
28.2 percent and 23.9 percent, respectively. Also
contributing to the improvement in the net payments in
the primary income account were lower net interest
payments on portfolio investments (by 3.4 percent) and
other investments (by 51.0 percent). As a result of the
decline in global interest rates, net interest payments by
the NG, and by private and public corporations on bonds
issued abroad declined by 6.8 percent and 38.5 percent,
respectively. Similarly, net interest payments on foreign
loans contracted by 30.6 percent and 51.1 percent,
respectively.
14
Total exports of BPO services amounted to US$3.1 billion in Q1 2013.
Income account posts lower net
payments
56
Secondary Income. Net receipts in the secondary income
account expanded by 3.5 percent to reach US$4.5 billion
compared to the year-ago level of US$4.3 billion. This was
due to the 4.2 percent uptrend in personal transfers
to US$4.2 billion during the quarter. Comprising about
98.0 percent of personal transfers, non-resident OF
workers’ remittances climbed by 3.4 percent from the
level in Q1 2012 to reach US$4.1 billion. Remittances
remained robust on account of sustained demand for
skilled Filipino workers overseas. The expanding
operations of remittance service providers across the
globe also facilitated a broader capture of remittances
through the formal channels.
Capital and Financial Account
Capital Account. The capital account registered
US$23.0 million net receipts in Q1 2013, slightly lower
than the US$25.0 million posted in the same quarter a
year ago. This developed as net receipts arising from
capital transfers to the NG declined during the period.
Financial Account. The financial account yielded net
borrowings by residents of US$1.5 billion in Q1 2013,
lower by 69.1 percent than the
US$4.8 billion recorded in the same period in 2012.15
Residents’ net incurrence of liabilities (US$2.2 billion)
exceeded their net acquisition of financial assets
15
Based on BPM6 concept, the overall balance in the financial account is termed as net lending/net borrowing. Net lending means that, in net terms, the
economy supplies funds to the rest of the world, taking into account acquisition and disposal of financial assets and incurrence and repayment of
liabilities. Net acquisition of financial assets and net incurrence of liabilities were previously referred to as residents’ investments abroad and non-
residents’ investments in the Philippines, respectively, based on BPM5 concept.
Net receipts in the capital account
decline moderately
Financial account shows net
borrowing by residents from the rest
of the world
Net receipts of secondary income
improve
57
(US$721.0 million). In particular, direct investments
registered lower net borrowing reflecting renewed
concerns over the weak recovery in the eurozone
following the financial difficulties faced by Cyprus.
Meanwhile, net borrowing in the portfolio investment
account increased in Q1 2013 compared to the same
period last year on the back of sustained investor
confidence over the country’s favorable economic
prospects. Other investments reversed to net lending
position in Q1 2013 from a net borrowing position in
Q1 2012.
Direct investment. The direct investment account
posted US$814.0 million net borrowing by residents
from the rest of the world in Q1 2013, lower by
9.4 percent than the level recorded in Q1 2012. The
lower net borrowing was driven mainly by the
8.5 percent decline in residents’ net incurrence of
liabilities (or foreign direct investments). In particular,
non-residents’ net equity capital investments during the
quarter reached US$729 million, lower by 22.2 percent
than the Q1 2012 level. On a gross basis, equity capital
placements were sourced primarily from Mexico, Japan,
Malaysia and the US and channeled to the following
sectors: a) manufacturing; b) water supply, sewerage,
waste management and remediation activities;
c) financial and insurance activities; d) arts,
entertainment and recreation; and e) real estate. Non-
residents’ reinvestment of earnings likewise declined by
26.3 percent while their placements in domestic debt
Direct investments register net
borrowing
58
instruments rose by 71.0 percent during the quarter.
Meanwhile, residents’ net acquisition of financial assets
declined by 7.0 percent during the period to settle at
US$489 million, driven mainly by the 46.6 percent drop
in domestic corporations’ investments in debt
instruments issued by foreign affiliates.
Portfolio investment. Net borrowings in the portfolio
investment account reached US$3.1 billion in
January-March 2013, more than double the
US$1.2 billion posted in the same period last year. In
particular, residents’ net withdrawal of financial assets
yielded US$771.0 million, a reversal of the
US$786.0 million net acquisition of financial assets in
Q1 2012. Meanwhile, residents’ net incurrence of
liabilities reached US$2.4 billion during the quarter,
higher by 15.6 percent. The following transactions
contributed to the net incurrence of liabilities in the
portfolio investment account during the period:
a) Net placements by non-residents in short-term
peso-denominated government securities (money
market instruments) issued by the NG
(US$850.0 million);
b) Non-residents’ net placements in equity securities
issued by local corporations (US$966.0 million);
c) Non-residents’ net placements in long-term debt
securities issued by local corporations
(US$806.0 million) and domestic deposit-taking
corporations (US$480.0 million); and
Portfolio investment account records
higher net borrowing
59
d) Residents’ net resale to non-residents through
secondary market trading of foreign
currency-denominated bonds issued by the NG
(US$467.0 million).
These were partially offset by the NG’s redemption of
long-term bonds (US$800.0 million) and peso-
denominated government securities (US$424.0 million)
issued to non-residents.
Meanwhile, the main sources of net disposal of financial
assets are the net withdrawal of placements in foreign
debt securities by domestic deposit-taking corporations
(US$630.0 million) and other domestic corporations
(US$148.0 million).
Financial derivatives. Financial derivatives yielded a net
loss of US$52.0 million in Q1 2013, a reversal of the
US$60.0 million net gain in the comparable period last
year due to higher net payments by resident investors
from cash settlements in financial derivatives during the
period.
Other investments. The other investment account
registered net lending by residents to the rest of the
world amounting to US$2.4 billion in Q1 2013, a
turnaround from the US$2.6 billion net borrowing
recorded in the same quarter last year. Residents’ net
acquisition of financial assets reached US$1.0 billion
during the review quarter, a reversal of the US$2.8
Trading in financial derivatives
registers net loss
Other investments reverse to net
borrowings from the rest of the world
60
billion net disposal of financial assets registered in the
same quarter last year. Meanwhile, net repayment of
liabilities stood at US$1.3 billion, more than eightfold the
US$156.0 million recorded last year.
The net repayment of liabilities in other investments
during the period stemmed from the following
transactions:
a) Non-residents’ net withdrawal of currency and
deposits in domestic deposit-taking corporations
(US$747.0 million);
b) Net repayment of long-term foreign loans by the NG
(US$425.0 million) and other domestic corporations
(US$213.0 million); and
c) Net repayment of trade credits and advances
extended by non-residents to domestic corporations
(US$360.0 million).
These were partly mitigated by the net incurrence of
other accounts payable by deposit-taking corporations
(US$425.0 million). Meanwhile, net acquisition of financial
assets in Q1 2013 was driven mainly by residents’ net
placements of currency and deposits in foreign banks
(US$455.0 million). This was partly offset, however, by
net repayments of foreign loans availed by local deposit-
taking corporations (US$250.0 million).
61
International Reserves
The country’s gross international reserves (GIR) continued
to grow but at a slower rate of 10.3 percent compared to
the year-ago increase of 15.4 percent, to reach
US$84.0 billion as of end-March 2013. The slowdown in
the rate of build-up of GIR could be attributed to declining
gold prices in the world market as well as diversification
strategies. The end-March GIR levels remain adequate to
cover 11.9 months worth of imports of goods and
payments of services and income. It is also equivalent to
9.9 times the country’s short-term external debt based on
original maturity and 6.3 times based on residual
maturity.
Inflows from the foreign exchange operations and
investment income of the BSP as well as foreign currency
deposits by the NG contributed to the increase in the GIR
level. These inflows were partly offset, however, by FX
outflows such as payments for maturing FX obligations by
the NG and foreign currency withdrawals by a
government–owned and –controlled corporation.
The bulk of the reserves, or about 85.0 percent of the
total GIR as of end-March, was held in foreign
investments. Meanwhile, 11.8 percent of total reserves
were in gold and the remaining 3.2 percent were the
combined holdings of Special Drawing Rights (SDRs), the
BSP’s reserve position in the International Monetary Fund
(IMF), and FX.
International reserves continue to
grow
Gross International ReservesGross International Reservesin million US Dollars
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar
2010 2011 2012 2013
62
In terms of currency composition, majority are held in US
dollars, comprising 78.2 percent of total GIR (excluding
gold) as of end-March. Meanwhile, 10.9 percent of the
reserves were denominate in yen, 4.6 percent in euro and
the remaining balance of 6.3 percent were in SDR and
other currencies.
Net international reserves (NIR), which refers to the
difference between the BSP’s GIR and total short-term
liabilities, was recorded at US$83.9 billion as of end-
March.
Exchange Rate
The peso continued to appreciate in the first quarter of
2013. The peso averaged stronger at P40.70/US$1,
appreciating by 1.2 percent relative to the fourth quarter
of 2012 average of P41.19/US$1. On a year-on-year basis,
the peso likewise appreciated by 5.8 percent from the
P43.05/US$1 average in the first quarter of 2012. The
peso was bouyed by the domestic economy’s resiliency,
along with the broadly strengthening global recovery. The
alleviation of downside risks (such as the fiscal
consolidation in the US and the on going financial sector
adjustments in the Eurozone) underpinned by continued
policy accomodation by various central banks likewise
supported the peso’s gains.
The peso continues to strengthen
(4.3)
(2.8)
(1.8)
(1.4)
0.3
0.6
0.8
1.3
4.3
-5 -4 -3 -2 -1 0 1 2 3 4 5
South Korean Won
New Taiwan Dollar
Singapore Dollar
Malaysian Ringgit
Chinese Yuan
Philippine Peso
Indonesian Rupiah
Indian Rupee
Thai Baht
AVERAGE REAL LENDING RATES - ASIAN COUNTRIES in percent
PERCENTAGE CHANGE OF SELECTED CURRENCIESClosing Prices: 27 March 2013 vs. 29 December 2012
63
In January 2013, the peso appreciated by 0.7 percent
compared to the December 2012 average of P41.01/US$1
as risk appetite for emerging market assets were
bolstered by the US congress measure to avert the US
Fiscal cliff and China’s stronger-than-expected growth in
2012.16 The peso sustained its appreciating trend in
February 2013, bouyed up by robust FX inflows from OF
remittances, export receipts, and FDI.17 However, the
peso traded lower the following month as the radical
bailout plan for Cyprus reignited concerns on the
Eurozone debt crisis.18
On a year-to-date basis, the peso appreciated against the
US dollar by 0.6 percent on 27 March 2013 as it closed at
P40.80/US$1, moving in tandem with the rest of the Asian
currencies except the Japanese yen, the South Korean
won, New Taiwan dollar, Singaporean dollar, and the
Malaysian ringgit, which depreciated vis-à-vis the US
dollar.19
On a real, trade-weighted basis, the peso lost external
price competitiveness against the basket of currencies of
major trading partners (MTPs) and competitor countries
in the broad series during the review quarter.20 These
developed due to the peso’s nominal appreciation relative
16
On 2 January 2013, US law makers have agreed on a compromise agreement wherein tax hikes will be implemented for individuals earning US$400,000
annually and households earnings US$ 450,000 annually while new limits will be implemented for wealthy Americans who use exemptions and
deductions to reduce taxes. Meanwhile, China’s economy grew by 7.8 percent for the whole year of 2012. 17
Personal remittances from overseas Filipinos (OFs) in December 2012 expanded by 9.7 percent year-on-year, the highest monthly growth registered in
2012, to reach US$2.2 billion. Meanwhile, foreign direct investments (FDI) registered net inflows of US$1.2 billion for January-November 2012, slightly
higher by 1.1 percent than the level posted in the comparable period of the previous year. 18
Reuters 19
Based on the last done deal in the afternoon. 20
The basket of the major trading partners is composed of the currencies of US, Japan, the Euro area and the United Kingdom. The broad basket of
competitor countries comprises the currencies of Singapore, South Korea, Taiwan, Malaysia, Thailand, Indonesia and Hong Kong while the narrow basket
is composed of the currencies of Indonesia, Malaysia and Thailand only.
64
to these baskets of currencies, leading to an increase in
the real effective exchange rate (REER) index of the peso
by 3.4 percent and 0.1 percent, respectively.21
Meanwhile, the peso gained external price
competitiveness against competitor countries in the
narrow series as the narrowing inflation differential
relative to this basket of currencies more than offset the
peso’s nominal appreciation, leading to a real
depreciation of the peso by 0.7 percent.
On a y-o-y basis, the peso lost external price
competitiveness against the basket of currencies of MTPs
and competitor countries in both the broad and narrow
series due mainly to the peso’s nominal appreciation. This
development led to a real appreciation of the peso
against the basket of currencies of MTPs and competitor
countries in both the narrow and broad series by
11.0 percent, 7.8 percent, and 9.6 percent, respectively.
External Debt
As of end-March 2013, the outstanding BSP-
approved/registered external debt stood at
US$59.0 billion, down by US$1.3 billion or 2.1 percent
from the end-December 2012 level of US$60.3 billion. On
a year-on-year basis, the debt stock decreased by
US$2.6 billion or 4.2 percent from the end-March 2012
level of US$61.6 billion.
21
The REER index represents the Nominal Effective Exchange Rate (NEER) index of the peso, adjusted for inflation rate differentials with the countries
whose currencies comprise the NEER index basket. A decrease in the REER index indicates some gain in the external price competitiveness of the peso,
while a significant increase indicates the opposite. The NEER index, meanwhile, represents the weighted average exchange rate of the peso vis-à-vis a
basket of foreign currencies.
External debt stays manageable
.
Short-term
US$9.8B
16.6%
Medium and long-
term
US$49.3B
83.4%
TOTAL: US$59.0 Billion
Philippine External Debt
As of end-March 2013
65
The decline in the debt stock in Q1 2013 was attributed
to negative FX revaluation adjustments (US$1.4 billion), as
the US dollar strengthened against other currencies,
particularly the Japanese yen, as well as net repayments
(US$282.0 million). These were partially offset by
increased investments by non-residents in Philippine debt
papers (US$421.0 million) due to sustained investor
confidence in the country coupled with a dearth of
attractive investment instruments.
Meanwhile, the y-o-y decline was due to negative FX
revaluation adjustments (US$2.0 billion) and increase in
residents’ investments in Philippine debt papers
(US$727.0 million).
Medium- to long-term (MLT) loans (with maturities longer
than one year) declined to US$49.3 billion (83.4 percent
of total external debt) from the end-December 2012 level
of US$51.9 billion (85.9 percent of total external debt).
On the other hand, short-term (ST) obligations (those with
original maturities of up to one year) increased to
US$9.8 billion in end-March 2013 (16.6 percent of total
external debt) from US$8.5 billion in the previous quarter
(14.1 percent of total external debt) due to higher inter-
bank borrowings.
MLT loans continued to dominate the country’s external
debt profile. The larger share of MLT accounts to total
66
external debt indicate that loan payments are spread out
over a longer period of time, resulting in a more
manageable level of debt servicing. The weighted average
maturity of 20.3 years for loans with original tenors of
more than one (1) year was slightly shorter than the 20.4
years recorded a quarter ago. This excluded the SDR
allocation22 from the International Monetary Fund
(US$1.3 billion) which is considered as permanent debt.
The country’s external debt to GNI ratio (a solvency
indicator) was estimated at 19.1 percent as of end-March
2013, lower than the ratio of 20.2 percent in
end-December 2012 and 22.5 percent obtained in end-
March 2012. Similarly, the external debt to GDP ratio was
estimated at 22.8 percent during the review period, lower
than the 24.1 percent a quarter ago and 26.9 percent
posted a year ago.
The debt service burden (DSB) ratio, which relates the
total principal and interest payments to the total exports
of goods and receipts from services and income (XGSI),
was estimated at 11.0 percent for the period ending
March 2013, higher than the 6.1 percent and 9.5 percent
in end-December 2012 and end-March 2012, respectively.
The ratio, which is a measure of the adequacy of the
country’s foreign exchange earnings to meet maturing
loan payments, has remained below the international
benchmark range of 20.0-25.0 percent.
22
SDR allocation from the IMF is excluded from the calculation of weighted average maturity of MLT accounts, being a permanent debt to be repaid only
in the event that the IMF SDR Department ceases to exist or the debtor country ceases to be a member of the IMF.
67
Foreign Interest Rates
Monetary policy in advanced economies remained
accommodative during the review period to support the
pace of economic recovery due to continued weakness in
labor market conditions, slowdown in spending, and
anemic bank lending growth.
In Q1 2013, the Federal Open Market Committee (FOMC)
maintained the target range for the federal funds at 0.0 to
0.25 percent and currently anticipates that this low range
for the federal funds rate will be appropriate as long as
the unemployment rate remains above 6.5 percent. In
addition, the FOMC decided to continue purchasing
additional agency mortgage-backed securities at a pace of
$40.0 billion per month. The FOMC will also purchase
longer-term Treasury securities after its program to
extend the average maturity of its holdings of Treasury
securities is completed at the end of the year, initially at a
pace of $45.0 billion per month. It will likewise maintain
its existing policy of reinvesting principal payments from
its holdings of agency debt and agency mortgage-backed
securities in agency mortgage-backed securities, and will
resume rolling over maturing Treasury securities at
auction. These actions are expected to maintain
downward pressure on longer-term interest rates,
support mortgage markets, and help to make broader
financial conditions more accommodative. 23 As the FOMC
23
Federal Reserve, FOMC Statements on 30 January 2013 and 20 March 2013 are available online at:
http://www.federalreserve.gov/newsevents/press/monetary/2013monetary.htm
Monetary policy in advance
economies remains accommodative
68
maintained its monetary policy stance, the US prime rate
and discount rate continued to average at 3.25 percent
and 0.75 percent, respectively, during the review period.24
Meanwhile, the U.S. federal funds rate decreased to
0.16 percent in the first quarter of 2013 from the
0.17 percent average reported in the previous quarter
(Table 16).
The Monetary Policy Committee (MPC) of the Bank of
England (BOE) also maintained its monetary policy
settings, keeping the official bank rate paid on commercial
bank reserves at 0.5 percent in the first quarter of 2013.
In addition, the MPC also decided to maintain the stock of
asset purchases financed by the issuance of central bank
reserves at £375 billion.25
Similarly, the Bank of Japan (BOJ) kept the
uncollateralized overnight call rate at around 0 to 0.1
percent. In achieving price stability target, the BOJ will
pursue aggressive monetary easing, through a virtually
zero interest rate policy and purchases of financial assets.
With respect to the Asset Purchase Program (APP), the
BOJ introduced a method of purchasing certain amount of
financial assets every month. The total amount of
monthly purchases is specified at about 13.0 trillion yen,
2.0 trillion yen of which are Japanese government bonds.
As a result, the total size of the APP will be increased by
24
The prime rate refers to the interest rate charged by banks to their most creditworthy customers. The discount rate refers to the rate charged by the
Federal Reserve Bank when it extends credit to depository institutions. 25
The previous change in the official bank rate was a reduction of 0.5 percentage points to 0.5 percent on 5 March 2009. A program of asset purchases
financed by the issuance of central bank reserves was initiated on 5 March 2009. The previous change in the size of that program was an increase of
£50 billion to a total of £375 billion on 5 July 2012.
69
about 10.0 trillion yen in 2014 and is expected to be
maintained thereafter.
The Governing Council of the European Central Bank
(ECB) kept the interest rates unchanged during its
10 January, 7 February, and 7 March meetings. The
interest rates on the main refinancing operations and on
the marginal lending facility and deposit facility remained
at 0.75 percent, 1.50 percent, and 0.0 percent,
respectively, at the end of first quarter 2013.26 The
Governing Council also decided to continue conducting its
main refinancing operations as fixed rate tender
procedures with full allotment for as long as necessary,
and at least until the end of the sixth maintenance period
of 2013 on 9 July 2013.
Meanwhile, the 90-day LIBOR and the 90-day Singapore
Interbank Offered Rate (SIBOR) decreased by 7.98 basis
points and 7.47 basis points, respectively, as global
financial markets remained liquid. The LIBOR averaged
0.2917 percent while the SIBOR stood at 0.2951 percent,
respectively, (Table 16).
Global Economic Developments
Global economic growth weakened in the first quarter of
2013 compared to the previous quarter due to the
protracted period of slow growth in the euro area and
Japan. Meanwhile, labor market conditions generally
26
The decisions of the Governing Council of the European Central Bank are available online at:
http://www.ecb.int/press/govcdec/mopo/2013/html/index.en.html
Global economic growth weakens
70
worsened except in the US. Inflation rates of advanced
economies were also generally lower while those of
emerging markets showed mixed trends.
World economic growth was weighed down by the soft
economic activity in mature economies in the first quarter
of 2013. The euro area’s GDP further deteriorated by
0.1 percent from the 0.9 percent decline in Q4 2012.
Tough austerity measures imposed by debt-ridden
governments have been undermining domestic
consumption in the region.
Economic activity in Japan likewise weakened in Q1 2013,
with GDP growing only by 0.2 percent from the last
quarter’s 0.5 percent due to lower capital spending.
Nonetheless, Japan’s economy is expected to resume its
moderate recovery supported by aggressive monetary
easing, stimulus spending and the expected pick-up in
global growth.
The US GDP growth rate accelerated slightly to 1.8
percent in Q1 2013 from the previous quarter’s 1.7
percent. This growth was driven by positive contributions
from personal consumption expenditures, private
inventory investment, residential fixed investment, and
nonresidential fixed investment, which partly offset the
negative contributions from government spending.
Among the newly-industrialized economies (NIEs) in Asia,
countries such as Hong Kong and South Korea grew by the
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
G3 US 2.0 1.3 2.6 1.7 1.8 2.3 1.9 1.7 1.9 1.7 8.3 8.2 8.0 7.8 7.7 Japan 3.4 4.0 0.3 0.5 0.2 0.4 0.1 -0.4 -0.2 -0.6 4.5 4.4 4.3 4.2 4.3 Euro area 0.1 -0.2 -0.6 -0.9 -1.0 2.6 2.5 2.5 2.3 1.8 10.9 11.3 11.5 11.8 12.0Asian NIEs Hong Kong 0.7 0.9 1.5 2.8 2.8 4.7 4.2 3.0 3.7 2.8 3.3 3.2 3.2 3.4 3.4 South Korea 2.8 2.4 1.6 1.5 1.5 2.5 2.4 1.6 1.7 1.4 3.4 3.3 3.1 3.0 3.3 Singapore 1.5 2.3 0.0 1.5 -0.6 5.4 5.2 4.2 4.0 4.0 2.1 2.1 2.0 1.9 1.8 China 8.1 7.6 7.4 7.9 7.7 3.4 3.4 2.0 2.2 2.5 4.1 4.1 4.1 4.1 4.1 India 5.3 5.5 5.3 4.5 4.8 7.2 7.2 7.9 7.2 6.9 9.4 9.4 n.a. n.a. n.aASEAN Indonesia 6.3 6.4 6.2 6.1 6.0 4.5 4.5 4.5 4.4 5.3 6.3 6.3 6.1 n.a. n.a. Malaysia 5.1 5.6 5.3 6.5 4.1 1.9 1.7 1.4 1.3 1.5 3.0 3.0 3.0 3.1 3.3 Philippines 6.3 6.0 7.2 6.8 7.8 3.0 2.9 3.5 2.9 3.2 7.2 7.2 6.9 7.0 7.1 Thailand 0.4 4.4 3.1 19.1 5.3 2.5 2.5 2.9 n.a. 1.5 0.7 0.7 0.6 0.5 0.7 Vietnam 4.0 4.7 4.7 5.0 5.4 10.5 10.5 5.6 7.0 6.9 2.3 1.9 2.1 n.a. n.a.
Real GDPCountry
Sources: Bloomberg; The Institute of International Finance, Inc.; Bureau of Economic Analysis; Bureau of Labor Statistics; Cabinet Office; European Central Bank; Hong Kong Administrative Region Government Portal; and Korea National Statistics
1/ Unemployment rate is the proportion (in percent) of the total number of unemployed to the total number of persons in the labor force.
Macroeconomic Indicators in Selected Economies, Q1 2013Year-on-year growth rates (in percent)
Unemployment1/Inflation
71
same rate as in the previous quarter, posting 2.8 percent
and 1.5 percent, respectively. Meanwhile, China’s GDP
slightly slowed down to 7.7 percent in Q1 2013 compared
to 7.9 percent in the previous quarter. The weak
government spending on infrastructure projects such as
urban subways, and the frail moves of the central bank to
boost liquidity in the banking system weighed down on
China’s GDP growth.
The average inflation rates of major advanced economies
in Q1 2013 decelerated. In the US, the inflation rate
slightly decreased to 1.7 percent in the first quarter of
2013 from 1.9 percent in the previous quarter. In Japan,
deflation persisted at -0.6 percent from last quarter’s
-0.2 percent. Likewise, in the euro area, the inflation rate
declined to 1.8 percent from 2.3 percent in the previous
quarter.
In the Asian region, inflation trends varied in the first
quarter of 2013. The inflation rate in China rose to
2.5 percent. In contrast, the inflation rates in Hong Kong,
South Korea and India declined to 2.8 percent,
1.4 percent, and 6.9 percent, respectively, from previous
quarter’s 3.7 percent, 1.7 percent, and 7.2 percent.
Global job market conditions generally worsened, except
in the US. The rate of unemployment in the US eased to
7.7 percent from 7.8 percent in the previous quarter
reflective of the mild GDP growth. In the euro area,
unemployment inched up further to 12.0 percent from
72
11.8 percent in the previous quarter. Meanwhile,
unemployment in Japan rose to 4.3 percent from
4.2 percent in the previous quarter. In the East Asian
region, unemployment rates likewise increased
marginally, except in South Korea.
F. Financial Condition of the BSP
Balance Sheet
Based on preliminary and unaudited financial statement
of the BSP for 2012, total assets reached P3,975.9 billion,
5.0 percent or P188.0 billion higher than the year-ago
level (Table 17). Relative to the end-September 2012
level, the amount was higher by 2.2 percent or
P86.2 billion. The BSP’s liabilities increased by
P263.5 billion or 7.2 percent y-o-y to P3,911.4 billion, and
by 2.5 percent relative to the end-September 2012 level.
Meanwhile, the BSP’s net worth slightly declined to
P64.5 billion compared to the year-ago level of
P140.0 billion, as the growth in liabilities was higher than
the growth in assets during the period. The amount was
also lower than the P74.6 billion posted at end-September
2012.
The y-o-y expansion in the BSPs’ assets was largely due to
the build-up of international reserves, which accounted
for around 86 percent of total assets. The P137.8 billion
expansion in international reserves was principally due to
the continued foreign exchange operations and
investment income of BSP as well as deposits by the NG of
BSP’s net worth declines
Balance Sheet of the BSP*In billion pesos
2012 2011
Dec Sep Dec
Assets 3,975.9 3,889.7 3,787.9
Liabilities 3,911.4 3,815.1 3,647.9
Networth 64.5 74.6 140.0
* Unaudited.
73
proceeds from bond issuances and other foreign
borrowings.
The BSP’s liabilities similarly increased during the review
period due mainly to higher deposits, as part of the BSP’s
continued liquidity management operations. In particular,
reserve deposits of banks and other financial institutions
registered an increase of P109.1 billion to P782.6 billion
from P673.5 billion posted a year ago. Meanwhile,
placements in the SDA facility decreased by P2.7 billion to
P1,640.1 billion from P1,642.7 billion registered a year
ago.
Income Statement
Based on preliminary and unaudited data, the BSP’s
financial position recorded a loss of P27.0 billion
during the fourth quarter of 2012 (Table 18). The loss was
primarily the result of lower revenues combined with the
P14.8 billion foreign exchange losses realized during the
period.
Total revenues amounted to P15.4 billion, lower than the
P18.9 billion posted during the same period last year.
Interest income, which comprised the primary source of
revenues, was down by 15.1 percent or P1.8 billion lower
than the previous year’s level. Meanwhile, miscellaneous
income also dropped by 25.2 percent or P1.7 billion lower
than the level posted during the same period a year ago.
BSP registers lower net loss
Income Statement of the BSP*In billion pesos
2012 2011
Q4 Q3 Q4
Revenue 15.376 15.279 18.871
Less: Expense 27.544 27.727 29.144
Equals Net Income Before
FX Gains/Loss (-) -12.168 -12.448 -10.273
Add/Less: Gains/Losses on FX Rate
Fluctuations -14.812 -17.311 0.436
Less: Provision for Income Tax 0.045 0 0.231
Equals: Net Income Available
for Distribution -27.025 -29.759 -10.068
* Unaudited.
74
Total expenditures amounted to P27.5 billion, P1.6 billion
lower than the level posted for the same period last year.
The y-o-y decrease in expenditures was due mainly to
lower interest expense, which fell by 14.2 percent, on
account of decreased interest payments on lower SDA
placements.
G. Challenges and Policy Directions
While the global economy is seen to broadly strengthen
through 2013, persistent downside risks continue to
weigh on the overall world economic outlook. In
particular, the effects of ongoing financial sector
adjustments in the euro area and fiscal consolidation in
the US could continue to dampen international trade
flows, weaken market sentiment, and raise volatility in
financial markets. In addition, Japan’s monetary policy
easing, aimed at stimulating its economy, could have
important global trade dynamics implications. Meanwhile,
the recent signs of improvement in the US economy could
lead to possible capital flow reversals from emerging
economies. The biggest challenge for policymakers,
especially those in emerging economies, is to provide
sufficient buffers against adverse external developments
while moderating the build-up of domestic imbalances. In
particular, the challenge of managing large capital flows is
likely to lead to continuing exchange rate pressures in
many emerging economies.
For the Philippines, keeping the economy on a steady
growth course would require policies largely aimed at
75
nurturing domestic sources of growth to help compensate
for any weaknesses in external demand. In this regard,
close coordination between fiscal and monetary policies
will help ensure that the macroeconomic environment
remains supportive of sustainable and balanced growth.
The favorable fiscal position of the NG provides it with
sufficient policy space to support projects that will
continue to stimulate aggregate demand. Growth could
further accelerate once the various infrastructure projects
move forward. Furthermore, continuing social spending
programs for health, education, housing, employment,
and conditional cash transfers, as well as initiatives for
financial inclusion and consumer protection, shall help
promote inclusive and sustainable growth.
For its part, the BSP remains committed to its mandate of
safeguarding price stability and ensuring a
macroeconomic environment conducive to growth. With
a broadly benign inflation outlook, the BSP deems its
policy stance appropriate. Latest baseline forecasts
indicate that the future inflation path remains in line with
the target for 2013-2014, supported by firmly anchored
inflation expectations. The risks surrounding the inflation
projections also continue to be broadly balanced.
Downside risks to the inflation outlook center on the
uncertainty over the strength of the global economy and
its effects on global commodity prices, particularly oil. In
addition, the firmness of the peso could temper imported
inflation. However, additional petitions for utility rate
76
adjustments, with likely power rates increase in
Mindanao, and the impact of sustained FX inflows on
domestic liquidity growth could exert upside pressures on
inflation and would thus need to be monitored closely.
Of particular challenge moving forward is the continued
surge in capital inflows to the country, which has pushed
up the peso further against the US dollar. In addition, the
recent credit rating upgrades given by Fitch Ratings and
Standard and Poor’s as well as market expectations of a
further credit rating upgrades by other credit rating
agencies for the Philippines could attract further foreign
capital, posing risks to inflation and financial stability.
Against this backdrop, the BSP stands ready to employ,
from its menu of policy instruments, measures that will
help ensure that the benefits of capital flows are
maximized while warding off the potential destabilizing
impact of volatile capital flows on price and financial
stability. The BSP will also continue to maintain a market-
determined exchange rate, while guarding against
speculative flows that could contribute to the peso’s
volatility and undermine the inflation target.
Amid downside risks to global economic prospects on the
horizon, contingency measures are in place to ensure
adequate liquidity in the financial system should capital
flows reverse course. The BSP will maintain a comfortable
level of international reserves to serve as added insurance
against external shocks.
77
However, guarding against destabilizing financial market
imbalances arising from capital inflow surges imposes a
cost on the BSP. In this regard, efforts are also being
undertaken to reinforce the BSP’s capacity to manage
these risks effectively. The full capitalization of the BSP is
being pursued to enhance its financial position and help
ease the constraints posed by balance sheet weaknesses
and operating losses. This is complemented by a number
of proposed amendments to the BSP Charter, including:
(1) increasing the BSP’s authorized capital from
P50.0 billion to a higher level commensurate with the
expansion in the size of the economy and the financial
system; (2) setting up of a formal arrangement on the
sharing of gains and losses by the NG and the BSP;
(3) restoring the BSP’s ability to issue its own debt
securities to enable it to siphon excess money supply from
circulation; (4) allowing the BSP to set up reserves to
absorb losses from FX fluctuations; and (5) granting of tax
exemption to the BSP.
In the area of banking regulation and supervision, the BSP
will sustain the reform momentum with a view to
strengthen the resilience of the banking system against
shocks as well as to enhance its role as a catalyst for
durable long-term economic growth. Toward this end, the
BSP continues to enhance its monitoring of financial
market developments as it also continues to put in place
measures to strengthen the capacity of the banking
system to endure shocks, including the adoption of
expanded reporting standards for real estate exposures as
78
well as the Basel III capital adequacy standards beginning
January 2014. Likewise, the BSP continues to take the lead
in promoting financial inclusiveness with programs and
reforms aimed at promoting greater access to financial
services.
The BSP also remains proactive in ensuring the credibility
of the payments and settlements system with the
continued enhancement of its processes in accordance
with international best practices.
Finally, amid the increasing interconnectedness of global
financial markets, the BSP will remain an active
participant in regional and international cooperation
programs and fora, in order to reap the benefits of
collaborative engagement.
79
Annex A
Banking Policies
Banking policies implemented during the quarter were aimed at strengthening regulations and
guidelines on: 1) single borrower's loan (SBL) limit; 2) minimum capital and disclosure requirements
in accordance with the Basel III standards; 3) amendment to the regulations on individual and
aggregate ceilings on loans, other credit accommodations and guarantees to directors, officers,
stockholders and their related interests (DOSRI); 4) required disclosures in the published balance
sheet; and 5) macro-prudential measure for handling non-deliverable forwards involving the
Philippine peso.
Amendment to Regulations on Single Borrower's Limit
The Monetary Board decided to extend for another three years the original three-year period allowing
a separate single borrower’s loan (SBL) limit of 25.0 percent of the net worth of the lending
bank/quasi-bank for loans, credit accommodations and guarantees granted for undertaking
infrastructure and/or development projects under the Public-Private Partnership (PPP) Program of
the government duly certified by the Secretary of Socio-Economic Planning.
The extension of another three years for the separate 25.0 percent SBL for PPP infrastructure and/or
development projects is expected to encourage the financial sector’s participation in the PPP Program
of the government, particularly with respect to the projects that are still in the pipeline. With the
extension, the window will be open until 28 December 2016. Loans, credit accommodations and
guarantees based on the contracted amount as of 28 December 2016 period shall not be increased
but may be reduced and once reduced, said exposures shall not be increased thereafter.
To strengthen the application of the SBL limit and the equity investment ceilings on underwriting
exposures of universal banks (UBs) and investment houses (IHs), the BSP also issued Circular No. 784
to tighten the holding period for not recognizing the risk exposure involve for any unsold portion of
80
the issue taken on by the said UB and IH for its own account as a result of its securities underwriting.
(Circular No. 779 dated 9 January 2013 and Circular No. 784 dated 25 January2013.)
Basel III Implementing Guidelines on Minimum Capital Requirements
The BSP approved the implementing guidelines on the revised risk-based capital adequacy framework
particularly on the minimum capital and disclosure requirements for the Philippine banking system in
accordance with the Basel III Standards. Basel III introduces a complex package of reforms designed to
improve the ability of bank capital to absorb losses, extend the coverage of financial risks and
strengthen the firewalls against periods of stress. Guidelines directed banks to be fully compliant by
January 2014. The rules introduce a capital conservation buffer of 2.5 percent for universal and
commercial banks made up of common equity Tier 1 or Common Equity Tier 1 (CET1) capital. Thrift
banks and rural banks will have its own set of Basel III guidelines but the set of requirements for
qualifying capital will be the same.
Stand alone thrift banks, rural banks, cooperative banks and quasi-banks, as well as their subsidiary
banks/quasi-banks shall continue to be subject to the existing applicable regulations on risk based
capital adequacy framework. However, capital instruments issued by said banks shall be subject to the
criteria for inclusion as qualifying capital provided in Annexes A to C and E to F of Appendix 63b/Q-46
of the Manual of Regulations for Banks (MORB)/ Manual of Regulations for Non-Bank Financial
Institutions (MORNBFI).
The capital adequacy ratio (CAR) requirement was retained at 10.0 percent. Ratios introduced under
Basel III are CET 1, which the BSP set at 6.0 percent, and Tier 1 capital, which was set at 7.5 percent.
“The risk-based capital ratio of a bank, expressed as a percentage of qualifying capital to risk weighted
assets, shall not be less than ten percent (10.0 percent) for both solo basis (head office plus branches)
and consolidated basis (parent bank plus subsidiary financial allied undertakings, but excluding
insurance companies). Other minimum capital ratios include CET1 capital ratios of 6.0 percent and
7.5 percent, respectively.”
81
Meanwhile, instrument issued as hybrid Tier 1 or lower Tier 2 capital will be recognized as regulatory
capital until 31 December 2015.
The BSP also approved the risk disclosure requirements on the loss absorbency features of Additional
Tier 1 and Tier 2 capital instruments eligible under the Basel III framework. The said requirements
uphold investor protection through enhanced disclosure transparency.
When marketing, selling and distributing Additional Tier 1 and Tier 2 instruments eligible as capital
under the Basel III framework, banks/quasi-banks must subject investors to a client suitability test and
provide appropriate Risk Disclosure for the issuance of Additional Tier 1 and Tier 2 capital instruments,
among others. (Circular No. 781 dated 15 January 2013 and Circular No. 786 dated 15 February 2013)
Amendment to the Regulations on Individual and Aggregate Ceilings on Loans, Other Credit
Accommodations and Guarantees to Directors, Officers, Stockholders and their Related Interests
The provisions of the MORB on exclusions from individual and aggregate ceilings on loans, other credit
accommodation and guarantees to DOSRI are amended by adding a new exclusion or adding item “d”
in subsection x330.1 as follows:
d. The portion of loans and other credit accommodations covered by guarantees of
international/regional institutions/multilateral financial institutions where the Philippine Government
is a member/shareholder, such as International Finance Corporation (IFC) and the Asian Development
Bank (ADB).
(Circular No. 785 dated 25 January 2013)
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Amendments to Required Disclosures in the Published Balance Sheet
The BSP amended subsection x192.9 of the MORB on Publication/Posting of Balance Sheet (BS) as
follows:
Banks shall disclose the following information in the quarterly published/posted BS:
Solo BS (Head Office and Branches/Other Offices)
1. Gross total loan portfolio (TLP)
2. Specific allowance for credit losses on the TLP
3. Non-performing loans (NPLs)
a. Gross NPLs
b. Ratio of gross NPLs to gross TLP (in percent)
c. Net NPLs
d. Ratio of Net NPLs to gross TLP (in percent)
4. Classified loans and other risk assets, gross of allowance for credit losses
5. DOSRI loans and receivables, gross of allowance for credit losses
6. Ratio of DOSRI loans and receivables, gross of allowance for credit losses, to gross TLP (in percent)
7. Gross non-performing DOSRI loans and receivables
8. Ratio of Gross non-performing DOSRI loans and receivables to gross TLP (in percent)
9. Percent compliance with Magna Carta
a. 8 percent of Micro and Small Enterprises
b. 2 percent for Medium Enterprises
10. Return on Equity (ROE) (in percent)
11. CAR on Solo Basis, as prescribed under existing regulations
a. Total CAR (in percent)
b. Tier 1 CAR (in percent)
12. Deferred charges not yet written down; and
13. Unbooked allowance for credit losses on financial instruments received
83
Consolidated BS (parent bank and financial allied subsidiaries excluding subsidiary insurance
companies)
1. List of financial allied subsidiaries (excluding subsidiary insurance companies)
2. List of subsidiary insurance companies
3. CAR on consolidated basis, as prescribed under existing regulations
a. Total CAR (in percent)
b. Tier 1 CAR (in percent)
(Circular No. 788 dated 26 February 2013)
Macro-prudential Measure for Handling Non-Deliverable Forwards Involving the Philippine Peso
The BSP issued a Circular on macro-prudential measure for handling non-deliverable forwards (NDFs)
involving the Philippine peso.
To mitigate any potential build-up of systemic risks, bank’s total gross exposures to all forms of peso
NDF transactions, shall be limited to a fixed percentage of a bank’s capital base. Unless otherwise
amended, the said limit is 20 percent of unimpaired capital for domestic banks. Foreign bank branches
shall have a limit equal to 100 percent of their unimpaired capital.
Banks which are presently in excess of the NDF exposure limits shall be given two months from the
effectivity of Circular No. 790 to comply with the prescribed limits. However, banks with peso NDF
exposures at the time the Circular takes effect but do not have at least a Type 2 derivatives license are
not allowed to enter into further peso NDF exposures except to close out said positions. Banks must
demonstrate to the appropriate unit of the Supervision and Examination Sector that transactions
under this situation are meant to square existing positions directly.
84
The provisions in the Manual of Regulations on Foreign Exchange Transactions requiring prior BSP
clearance for forward contracts involving sale of foreign exchange to non-residents with no full
delivery of principal, including cancellations, rollovers/renewals, were deleted. (Circular No. 790 dated
6 March 2013)
85
Annex B
Capital Market Reforms
Promoting investor confidence
The Philippine Stock Exchange (PSE) revised the composition of the Philippine Stock Exchange Index
(PSEi) along with the other sector indices based on the previously approved criteria. To qualify for the
PSEi, companies are required to meet a free float level of at least 12.0 percent, must be among the top
25.0 percent by median daily value per month for at least nine out of 12 months, and should be
included in the top 30 based on full market capitalization. To be included in the sector indices,
companies must rank among the top 50.0 percent in terms of median daily value per month in eight
out of the 12 month period in review.
Enhancing transparency and corporate governance
The Bangko Sentral ng Pilipinas (BSP) has initiated disclosure requirements for debt instruments issued
by banks which qualify as Basel III-eligible capital. The move is a pro-active stance to strengthen
investor protection in light of the so-called loss absorbency feature. Under the Basel III framework,
debt instruments that are treated as part of bank capital must have a provision that requires such
instruments, at the option of the relevant authority, to either be written off or converted into
common equity upon the occurrence of trigger events. This puts these instruments on equal footing as
traditional bank equity as far as the ability to absorb losses from operations. Banks issuing securities
with the loss absorbency feature must issue a risk disclosure statement which outlines to potential
investors the financial risks involved with investing in the security as well as the processes that must
be followed once the thresholds are breached. Investors must sign off on the risk disclosure statement
to signify categorically that the investor has read the disclosure and understands the investment risks
involved.
86
Expanding products and markets
In a strong bid to boost participation in the Philippine stock market, the PSE proposed to establish a
Direct Market Access (DMA) in the local bourse to investors. The DMA is an arrangement whereby a
trading participant's client is permitted to enter orders to buy or sell securities directly into the PSE
trading system for queuing and matching without any manual intervention by the trading participant.
The DMA is being offered in various markets such as Malaysia, Singapore and Hong Kong. The set of
rules governing the provisions of DMA services shall be subject to further review by the PSE.
The Securities and Exchange Commission (SEC) has formally notified the PSE of the partial approval of
the PSE Rules on Exchange Traded Funds (ETFs). The SEC has approved the general provisions, listing
and disclosure proposals of the PSE but is still evaluating the rules governing market making for ETFs.
An ETF is a passively managed fund, similar to a mutual fund that tracks an index but is traded on a
stock exchange similar to stocks. It is an open-end investment company that continuously issues and
redeems its shares of stock in creation units in exchange for the delivery of a basket of securities
representing an index whose performance the ETF endeavors to track.
LIST OF STATISTICAL TABLES FOR THE 2013 FIRST QUARTER LTP
1 Gross National Income and Gross Domestic Product by Industrial Origin
1a Gross National Income and Gross Domestic Product by Expenditure Shares
2 Selected Labor, Employment and Wage Indicators
3 Cash Operations of the National Government
4 Consumer Price Index in the Philippines
4a Consumer Price Index in the National Capital Region
4b Consumer Price Index in Areas Outside the National Capital Region
5 Monetary Indicators (DCS Concept)
6 Selected Domestic Interest Rates
7 Number of Financial Institutions
8 Total Resources of the Financial System
9 Ratios of Non-Performing Loans and Loan Loss Provisions to Total Loans of the Banking System
10 Stock Market Transactions
11 Balance of Payments
11a Exports by Major Commodity Group
11b Imports by Major Commodity Group
12 International Reserves of the Bangko Sentral ng Pilipinas
13 Exchange Rates of the Peso (Peso per Unit of Foreign Currency)
13a Exchange Rates of the Peso (Unit of Foreign Currency per Peso)
13b Effective Exchange Rate Indices of the Peso
14 Total External Debt
15 Selected Foreign Debt Service Indicators
16 Selected Foreign Interest Rates
17 Balance Sheet of the Bangko Sentral ng Pilipinas
18 Income Statement of the Bangko Sentral ng Pilipinas
1 GROSS NATIONAL INCOME AND GROSS DOMESTIC PRODUCT BY INDUSTRIAL ORIGIN
for periods indicated
in million pesos, at constant 2000 prices
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Agriculture, Hunting, Forestry and Fishing 163,629 148,896 149,181 200,959 170,615 160,915 152,195 196,110 172,560 161,887 158,826 205,664 178,340 4.3 8.1 2.0 -2.4 1.1 0.6 4.4 4.9 3.3
Industry 425,567 489,793 447,055 497,101 454,771 481,033 446,150 511,302 478,924 508,847 477,887 556,965 530,994 6.9 -1.8 -0.2 2.9 5.3 5.8 7.1 8.9 10.9
Mining and Quarrying 13,903 23,580 13,448 14,968 18,380 25,606 13,993 12,530 18,074 27,258 13,829 12,885 15,003 32.2 8.6 4.1 -16.3 -1.7 6.5 -1.2 2.8 -17.0
Manufacturing 298,652 306,874 299,709 359,288 322,771 324,637 305,692 371,230 342,235 338,489 323,524 391,463 375,385 8.1 5.8 2.0 3.3 6.0 4.3 5.8 5.5 9.7
Construction 65,566 106,296 78,972 74,986 66,471 78,501 70,616 78,283 67,467 87,624 83,158 101,671 89,411 1.4 -26.1 -10.6 4.4 1.5 11.6 17.8 29.9 32.5
2012 2013
Annual Change (%)
2010 2011 2012 2013 2011
Electricity, Gas and Water Supply 47,445 53,043 54,926 47,859 47,148 52,289 55,850 49,260 51,148 55,475 57,375 50,946 51,195 -0.6 -1.4 1.7 2.9 8.5 6.1 2.7 3.4 0.1
Services 743,844 814,702 783,995 836,818 768,594 857,966 823,874 885,474 833,337 923,948 889,910 942,916 891,676 3.3 5.3 5.1 5.8 8.4 7.7 8.0 6.5 7.0
Transportation, Storage and
Communication 106,538 112,714 94,479 114,035 111,052 117,449 98,831 118,694 121,777 128,328 108,129 123,860 126,022 4.2 4.2 4.6 4.1 9.7 9.3 9.4 4.4 3.5
Trade and Repair of Motor Vehicles,
Motorcycles, Personal & Household Goods 206,308 226,459 244,719 271,256 212,164 232,115 255,680 280,555 228,701 250,135 276,518 299,037 241,578 2.8 2.5 4.5 3.4 7.8 7.8 8.2 6.6 5.6
Financial Intermediation 87,058 97,838 92,692 97,127 92,597 109,185 94,012 98,575 100,641 116,821 102,054 107,271 114,596 6.4 11.6 1.4 1.5 8.7 7.0 8.6 8.8 13.9
R. Estate, Renting and Business Activities 139,097 153,607 150,320 145,922 146,521 165,120 162,086 164,518 157,962 178,418 174,796 175,254 167,882 5.3 7.5 7.8 12.7 7.8 8.1 7.8 6.5 6.3
Public Administration & Defense;
Compulsory Social Security 62,788 71,919 63,427 56,953 58,970 75,012 66,105 59,875 61,601 77,831 71,620 64,782 66,541 -6.1 4.3 4.2 5.1 4.5 3.8 8.3 8.2 8.0
Other Services 142,055 152,165 138,357 151,524 147,289 159,085 147,161 163,256 162,654 172,415 156,792 172,711 175,058 3.7 4.5 6.4 7.7 10.4 8.4 6.5 5.8 7.6
Gross Domestic Product 1,333,040 1,453,390 1,380,231 1,534,877 1,393,979 1,499,915 1,422,219 1,592,887 1,484,821 1,594,682 1,526,622 1,705,545 1,601,010 4.6 3.2 3.0 3.8 6.5 6.3 7.3 7.1 7.8
Net Primary Income 291,467 293,900 276,855 287,377 283,592 280,797 267,291 299,268 289,052 302,187 286,249 307,387 298,355 -2.7 -4.5 -3.5 4.1 1.9 7.6 7.1 2.7 3.2
Gross National Income 1,624,507 1,747,290 1,657,086 1,822,254 1,677,571 1,780,711 1,689,510 1,892,155 1,773,874 1,896,869 1,812,871 2,012,932 1,899,364 3.3 1.9 2.0 3.8 5.7 6.5 7.3 6.4 7.1
Total may not add up due to rounding.
Source : National Statistical Coordination Board
Note: Data on Real GDP and its components are based on 2000 prices. The use of terminology Gross National Income (GNI) in place of Gross National Product (GNP) has been adopted in the revised/rebased Philippine System of National Accounts (PSNA) in accordance with the 1993/1998 System of National Accounts prescribed by the United Nations.
2 SELECTED LABOR, EMPLOYMENT AND WAGE INDICATORS
2013p
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Employment Status 1
Labor Force (in thousands) 38,828 38,512 38,946 39,287 39,210 39,691 39,928 41,194 40,226 40,644 40,427 40,431 40,834
Employed 36,001 35,413 36,237 36,488 36,293 36,820 37,106 38,550 37,334 37,841 37,584 37,668 37,940
Unemployed 2,827 3,099 2,709 2,799 2,917 2,871 2,822 2,644 2,892 2,803 2,842 2,763 2,894
Underemployed 7,107 6,297 6,502 7,141 7,055 7,127 7,095 7,381 7,018 7,312 8,546 7,158 7,934
Labor Force Participation Rate (%) 64.5 63.6 63.9 64.2 63.7 64.2 64.3 66.3 64.2 64.7 64.0 63.9 64.1
Employment Rate (%) 92.7 92.0 93.0 92.9 92.6 92.8 92.9 93.6 92.8 93.1 93.0 93.2 92.9
Unemployment Rate (%) 7.3 8.0 7.0 7.1 7.4 7.2 7.1 6.4 7.2 6.9 7.0 6.8 7.1
Underemployment Rate (%) 19.7 17.8 17.9 19.6 19.4 19.4 19.1 19.1 18.8 19.3 22.7 19.0 20.9
Overseas Employment (Deployed) 388,495 385,072 399,061 298,198 419,503 460,457 431,493 376,378 466,927p
455,733p
416,029p
332,471p ..
Land-based 301,417 303,686 306,042 212,531 323,700 378,491 335,792 280,744 360,456 369,274 329,380 269,867 ..
Sea-based 87,078 81,386 93,019 85,667 95,803 81,966 95,701 95,634 106,471 86,459 86,649 62,604 ..
Strikes
Number of New Strikes 1 3 1 3 1 0 1 0 0 0 1 2 ..
Number of Workers Involved 1,800 387 47 800 128 0 3,700 0 0 0 20 189 ..
Nominal Daily Wage Rates (in pesos)
National Capital Region
Agricultural
Plantation 345.00 345.00 367.00 367.00 367.00 389.00 389.00 389.00 389.00 409.00 409.00 419.00 419.00a
Non-Plantation 345.00 345.00 367.00 367.00 367.00 389.00 389.00 389.00 389.00 409.00 409.00 419.00 419.00a
Non-Agricultural 382.00 382.00 404.00 404.00 404.00 426.00 426.00 426.00 426.00 426.00 446.00 456.00 456.00a
Real Daily Wage Rates (in pesos), 2006=100
National Capital Region
Agricultural
Plantation 298.96 297.67 315.56 309.97 306.09 320.43 320.96 318.85 316.00 329.57 325.90 334.13 333.86a
Non-Plantation 298.96 297.67 315.56 309.97 307.04 315.76 321.14 318.68 316.00 329.57 325.90 334.13 333.86a
Non-Agricultural 331.02 329.59 347.38 341.22 336.95 350.91 351.49 349.18 346.06 359.39 355.38 363.64 363.35a
Notes:
1 Starting with January 2007 LFS round, the population projections based on the 2000 Census of Population was adopted to generate the labor force statistics per NSCB Resolution No. 1 Series of 2005
¨ Data not availablep
preliminarya
As of March 2013
Numbers may not add up due to rounding.
Sources of data: Bureau of Labor and Employment Statistics (BLES), Philippine Overseas Employment Administration (POEA), National Statistics Office (NSO), National Wages and Productivity Commission (NWPC), and National Conciliation and Mediation Board (NCMB)
2010 2011 2012p
3 CASH OPERATIONS OF THE NATIONAL GOVERNMENT
for periods indicated
in billion pesos
2013 2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1
Program
Revenues 323.1 358.6 335.4 342.9 361.0 399.9 358.0 416.0 364.3 378.8
Tax 265.7 327.8 297.9 310.7 302.3 369.7 324.9 364.3 316.7 337.9
Non-tax 57.4 30.8 37.5 32.1 58.7 30.3 33.2 51.7 47.6 40.9
Expenditures 349.3 349.6 371.2 487.6 394.9 400.4 427.6 554.9 430.8 452.7
Interest Payments 90.7 43.8 87.9 56.6 98.5 51.5 95.2 67.6 98.3 109.3
Equity — 0.1 0.2 12.6 0.0 0.9 0.0 20.4 0.2 0.8
Net Lending 2.4 9.9 2.8 2.9 3.2 8.5 10.4 5.4 -8.1 -0.2
Subsidy 7.1 7.1 4.9 34.6 5.6 7.1 5.7 24.2 4.2 11.1
Allotment to LGUs 76.4 78.8 74.9 85.0 71.0 78.4 74.1 74.9 80.3 60.5
Tax Expenditures 8.1 2.9 2.3 12.6 7.3 7.6 3.4 14.1 0.6 3.3
Others 164.6 207.0 198.1 283.4 209.3 246.4 238.7 348.3 255.2 267.9
Surplus/Deficit (-) -26.2 9.0 -35.8 -144.8 -33.9 -0.5 -69.6 -138.9 -66.5 -73.9
Financing 1
-64.0 87.3 -13.6 105.5 162.5 12.2 91.2 272.3 -0.8 -9.0
External Borrowings 54.4 -5.8 11.8 -9.2 66.8 -5.7 -10.4 19.3 -49.3 -49.0
Domestic Borrowings -118.4 93.1 -25.3 114.7 95.7 17.9 101.6 253.0 48.5 40.0
Total Change in Cash: Deposit/Withdrawal (-) 77.6 241.6 -307.3 -91.6 164.7 -23.9 -45.5 196.5 -182.2 -144.6
Budgetary -90.2 96.3 -49.3 -39.2 128.6 11.7 21.7 133.4 -67.3 -82.9
Non-Budgetary Accounts 2
167.8 145.3 -257.9 -52.3 36.1 -35.6 -67.1 63.1 -114.9 -61.7
1 Availment less repayment
2 Refers to accounts not included in the NG budget, e.g., sale, purchase or redemption of government securities, but included in the cash operations report to
show the complete relations in the movements of the cash accounts.
Note: Details may not add up to total due to rounding off
Source: Bureau of the Treasury
20122011
4 CONSUMER PRICE INDEX IN THE PHILIPPINES (2000=100)
for periods indicated
(2006=100)
Quarterly Average
2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
ALL ITEMS 119.0 120.0 120.9 121.9 124.3 126.0 126.7 127.6 128.2 129.7 131.1 131.3 132.3
FOOD AND NON-ALCHOLIC BEVERAGES 128.0 128.3 129.8 131.7 135.2 136.2 136.7 138.1 137.9 138.8 140.9 141.3 141.6
FOOD ITEMS 128.9 129.2 130.8 132.8 136.5 137.4 137.9 139.4 139.1 139.9 142.1 142.6 142.8
ALCOHOLIC BEVERAGES, TOBACCO AND NARCOTICS 115.6 116.1 116.6 117.3 120.0 122.3 123.7 124.6 125.8 128.4 129.7 130.8 158.4
NON-FOOD 113.2 114.7 115.2 115.5 117.3 119.3 120.3 120.8 121.9 123.7 124.8 124.8 125.3
CLOTHING AND FOOTWEAR 112.9 113.6 114.7 115.4 116.5 117.8 119.3 119.9 120.9 123.7 125.3 125.9 126.8
HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 112.3 115.0 115.2 115.3 117.7 120.6 121.1 121.7 123.4 125.9 127.2 126.5 126.9
FURNISHINGS, HOUSEHOLD EQUIPMENT
AND ROUTING MAINTENANCE OF THE HOUSE 112.9 113.9 114.3 114.8 115.6 116.6 117.3 117.6 118.2 120.6 122.4 123.2 124.0
HEALTH 119.1 119.7 121.0 121.7 122.8 123.8 125.0 125.5 126.2 127.8 128.9 129.4 130.3
TRANSPORT 115.2 115.9 116.0 116.7 120.0 123.5 124.0 124.1 125.2 126.3 125.5 125.9 126.3
COMMUNICATION 92.6 92.6 92.7 92.6 92.5 92.4 92.4 92.2 92.2 92.5 92.6 92.6 92.7
RECREATION AND CULTURE 104.7 105.1 105.5 105.6 105.8 106.5 107.2 107.4 108.3 109.3 110.1 110.2 110.7
EDUCATION 121.6 123.1 126.3 126.7 126.8 128.7 132.7 132.8 132.9 134.8 138.7 138.7 138.7
RESTAURANTS AND MISCELLANEOUS GOODS AND SERVICES 115.1 115.8 116.3 116.7 117.9 119.0 119.9 120.4 121.5 123.0 123.8 124.2 125.0
2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
ALL ITEMS 1.1 0.9 0.7 0.8 2.0 1.3 0.6 0.7 0.5 1.1 1.1 0.2 0.7
FOOD AND NON-ALCHOLIC BEVERAGES 0.8 0.3 1.2 1.5 2.7 0.7 0.3 1.0 -0.1 0.6 1.5 0.3 0.2
FOOD ITEMS 0.9 0.3 1.2 1.6 2.7 0.7 0.4 1.1 -0.2 0.6 1.5 0.3 0.2
ALCOHOLIC BEVERAGES, TOBACCO AND NARCOTICS 1.1 0.5 0.4 0.6 2.3 1.9 1.1 0.7 1.0 2.1 1.0 0.8 21.2
NON-FOOD 1.3 1.4 0.4 0.2 1.6 1.7 0.8 0.4 0.9 1.5 0.8 0.1 0.3
CLOTHING AND FOOTWEAR 0.9 0.6 0.9 0.6 1.0 1.1 1.2 0.5 0.8 2.3 1.3 0.4 0.7
HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 2.1 2.5 0.1 0.1 2.1 2.4 0.4 0.5 1.4 2.0 1.0 -0.6 0.3
FURNISHINGS, HOUSEHOLD EQUIPMENT
AND ROUTING MAINTENANCE OF THE HOUSE 0.9 0.8 0.4 0.4 0.7 0.9 0.6 0.3 0.5 2.0 1.5 0.7 0.6
HEALTH 1.6 0.5 1.1 0.6 0.9 0.8 1.0 0.4 0.5 1.3 0.8 0.4 0.7
TRANSPORT 1.2 0.6 0.1 0.6 2.9 2.9 0.4 0.1 0.9 0.9 -0.6 0.3 0.3
COMMUNICATION -1.2 0.1 0.1 -0.1 -0.1 -0.1 0.0 -0.1 -0.1 0.3 0.1 0.0 0.1
RECREATION AND CULTURE -0.3 0.4 0.3 0.1 0.2 0.7 0.6 0.2 0.9 0.9 0.7 0.1 0.5
EDUCATION 0.5 1.2 2.6 0.3 0.1 1.5 3.1 0.1 0.1 1.5 2.9 0.0 0.0
RESTAURANTS AND MISCELLANEOUS GOODS AND SERVICES 0.9 0.6 0.4 0.3 1.0 1.0 0.7 0.4 1.0 1.2 0.7 0.3 0.6
2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
ALL ITEMS 3.9 3.8 3.9 3.5 4.5 4.9 4.8 4.7 3.1 2.9 3.5 2.9 3.2
FOOD AND NON-ALCHOLIC BEVERAGES 4.4 3.5 4.2 3.8 5.7 6.2 5.3 4.8 2.0 1.9 3.1 2.3 2.7
FOOD ITEMS 4.5 3.6 4.4 4.0 5.9 6.3 5.4 4.9 1.9 1.8 3.0 2.2 2.7
ALCOHOLIC BEVERAGES, TOBACCO AND NARCOTICS 3.6 3.0 2.7 2.6 3.8 5.3 6.1 6.2 4.8 5.0 4.9 5.0 25.9
NON-FOOD 3.6 4.1 3.8 3.3 3.7 4.0 4.4 4.6 3.9 3.7 3.7 3.3 2.8
CLOTHING AND FOOTWEAR 2.3 2.4 2.8 3.1 3.2 3.7 4.0 3.9 3.7 5.0 5.1 5.0 4.9
HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 4.2 5.9 5.6 4.8 4.9 4.8 5.2 5.6 4.8 4.4 5.0 3.9 2.8
FURNISHINGS, HOUSEHOLD EQUIPMENT
AND ROUTING MAINTENANCE OF THE HOUSE 2.4 2.6 2.6 2.5 2.4 2.4 2.6 2.5 2.3 3.4 4.4 4.8 4.9
HEALTH 3.9 3.8 3.7 3.7 3.0 3.4 3.3 3.2 2.8 3.3 3.1 3.1 3.3
TRANSPORT 5.7 4.4 2.4 2.5 4.2 6.6 6.9 6.4 4.3 2.2 1.2 1.5 0.9
COMMUNICATION -1.0 -1.0 -1.0 -1.1 -0.1 -0.3 -0.4 -0.4 -0.4 0.1 0.3 0.4 0.6
RECREATION AND CULTURE 0.7 0.6 0.6 0.5 1.1 1.3 1.6 1.7 2.4 2.6 2.7 2.6 2.2
EDUCATION 4.2 4.3 4.5 4.7 4.3 4.6 5.1 4.8 4.8 4.8 4.5 4.4 4.4
RESTAURANTS AND MISCELLANEOUS GOODS AND SERVICES 2.7 2.7 2.6 2.3 2.4 2.7 3.1 3.2 3.1 3.3 3.3 3.2 2.8
Source of basic data: National Statistics Office
2 0 1 1
2 0 1 1
2 0 1 1
Year-on-Year Change (in percent)
2 0 1 2
2 0 1 2
2 0 1 2
2 0 1 0
2 0 1 0
Quarter-on-Quarter Change (in percent)
2 0 1 0
4a CONSUMER PRICE INDEX IN METRO MANILA (2000=100)
for periods indicated
(2006=100)
Quarterly Average
2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
ALL ITEMS 114.8 116.0 116.7 117.6 119.5 120.9 121.2 122.1 122.9 123.7 125.6 125.4 125.7
FOOD AND NON-ALCHOLIC BEVERAGES 124.1 123.4 124.9 128.6 130.3 130.6 130.5 132.9 131.6 132.0 135.3 135.2 134.9
FOOD ITEMS 124.9 124.2 125.7 129.7 131.5 131.7 131.6 134.2 132.7 133.0 136.5 136.3 135.9
ALCOHOLIC BEVERAGES, TOBACCO AND NARCOTICS 115.0 115.5 115.8 116.3 117.6 118.9 119.1 119.5 120.4 122.5 124.2 126.5 140.3
NON-FOOD 110.9 113.0 113.3 113.1 115.2 117.0 117.4 117.7 119.4 120.3 121.7 121.4 121.7
CLOTHING AND FOOTWEAR 114.7 115.5 117.3 117.9 118.7 118.9 121.2 121.3 123.1 126.6 129.8 130.4 131.1
HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 111.2 115.4 114.9 114.0 116.6 119.2 119.3 120.0 121.8 122.9 124.5 123.4 123.5
FURNISHINGS, HOUSEHOLD EQUIPMENT
AND ROUTING MAINTENANCE OF THE HOUSE 109.7 111.0 111.4 111.8 112.1 112.2 112.3 112.4 112.7 114.1 117.7 119.2 120.5
HEALTH 121.7 122.0 124.7 125.0 126.7 127.0 128.8 129.0 130.0 130.8 132.4 132.6 134.5
TRANSPORT 106.4 106.9 106.3 107.2 110.8 114.3 114.0 113.7 114.9 114.4 113.8 114.3 114.2
COMMUNICATION 93.7 93.7 93.9 93.8 93.6 93.4 93.3 93.2 93.1 93.7 93.9 93.9 93.9
RECREATION AND CULTURE 105.8 106.7 107.2 107.4 107.5 107.4 107.3 107.3 110.2 111.1 112.5 112.5 113.1
EDUCATION 125.9 127.5 130.6 130.6 130.6 132.2 135.5 135.5 135.5 137.0 140.0 140.0 140.0
RESTAURANTS AND MISCELLANEOUS GOODS AND SERVICES 111.7 111.8 112.9 113.0 114.8 115.9 116.3 116.5 119.5 119.9 120.7 120.7 120.9
2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
ALL ITEMS 1.0 1.1 0.5 0.8 1.6 1.1 0.2 0.7 0.7 0.7 1.5 -0.1 0.2
FOOD AND NON-ALCHOLIC BEVERAGES -0.7 -0.6 1.2 3.0 1.3 0.2 -0.1 1.8 -1.0 0.4 2.5 -0.1 -0.3
FOOD ITEMS -0.8 -0.6 1.2 3.2 1.4 0.2 -0.1 1.9 -1.1 0.3 2.6 -0.1 -0.3
ALCOHOLIC BEVERAGES, TOBACCO AND NARCOTICS 0.9 0.4 0.3 0.5 1.1 1.1 0.2 0.3 0.8 1.7 1.4 1.8 10.9
NON-FOOD 1.8 1.9 0.2 -0.2 1.8 1.6 0.4 0.3 1.4 0.8 1.1 -0.2 0.2
CLOTHING AND FOOTWEAR 1.2 0.7 1.6 0.5 0.7 0.2 1.9 0.1 1.4 2.9 2.5 0.4 0.6
HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 3.6 3.8 -0.5 -0.8 2.3 2.2 0.1 0.6 1.5 0.9 1.3 -0.9 0.1
FURNISHINGS, HOUSEHOLD EQUIPMENT
AND ROUTING MAINTENANCE OF THE HOUSE 0.4 1.2 0.4 0.3 0.3 0.1 0.1 0.1 0.2 1.2 3.2 1.2 1.1
HEALTH 1.5 0.2 2.3 0.2 1.4 0.3 1.4 0.2 0.7 0.6 1.2 0.2 1.4
TRANSPORT 2.0 0.4 -0.6 0.8 3.4 3.1 -0.2 -0.3 1.0 -0.5 -0.5 0.5 -0.1
COMMUNICATION -1.3 0.0 0.2 -0.2 -0.2 -0.1 -0.2 -0.1 0.0 0.6 0.2 0.0 0.0
RECREATION AND CULTURE -0.6 0.8 0.5 0.1 0.1 -0.1 -0.1 0.0 2.7 0.8 1.3 0.1 0.5
EDUCATION 0.1 1.2 2.5 0.0 0.0 1.3 2.5 0.0 0.0 1.1 2.2 0.0 0.0
RESTAURANTS AND MISCELLANEOUS GOODS AND SERVICES 0.1 0.1 1.0 0.1 1.6 1.0 0.3 0.2 2.6 0.4 0.6 0.0 0.1
2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
ALL ITEMS 3.6 3.7 3.9 3.5 4.1 4.2 3.9 3.8 2.8 2.4 3.7 2.8 2.2
FOOD AND NON-ALCHOLIC BEVERAGES 3.6 2.2 2.8 2.8 5.0 5.8 4.5 3.3 1.0 1.1 3.7 1.8 2.5
FOOD ITEMS 3.8 2.3 2.9 2.9 5.3 6.1 4.7 3.4 0.9 1.0 3.7 1.6 2.5
ALCOHOLIC BEVERAGES, TOBACCO AND NARCOTICS 3.0 2.4 2.0 2.1 2.3 2.9 2.9 2.7 2.4 3.1 4.3 5.9 16.5
NON-FOOD 3.5 4.4 4.4 3.8 3.8 3.5 3.6 4.1 3.7 2.9 3.7 3.1 1.9
CLOTHING AND FOOTWEAR 2.6 3.0 3.7 4.0 3.5 3.0 3.4 2.9 3.7 6.5 7.1 7.4 6.6
HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 4.9 7.8 7.8 6.2 4.9 3.2 3.9 5.3 4.4 3.1 4.4 2.8 1.4
FURNISHINGS, HOUSEHOLD EQUIPMENT
AND ROUTING MAINTENANCE OF THE HOUSE 1.5 1.8 2.1 2.3 2.2 1.1 0.8 0.6 0.5 1.6 4.8 6.0 7.0
HEALTH 4.2 3.9 4.1 4.2 4.1 4.2 3.2 3.2 2.6 2.9 2.8 2.8 3.5
TRANSPORT 7.4 5.7 2.7 2.7 4.1 6.9 7.3 6.1 3.7 0.1 -0.2 0.5 -0.6
COMMUNICATION -1.5 -1.5 -1.2 -1.2 -0.1 -0.3 -0.7 -0.6 -0.5 0.3 0.7 0.8 0.8
RECREATION AND CULTURE 0.7 0.3 0.8 0.9 1.6 0.7 0.1 -0.1 2.5 3.4 4.8 4.9 2.6
EDUCATION 2.3 2.9 4.1 3.8 3.7 3.7 3.8 3.8 3.8 3.6 3.3 3.3 3.3
RESTAURANTS AND MISCELLANEOUS GOODS AND SERVICES 1.4 0.5 1.3 1.3 2.8 3.7 3.0 3.1 4.1 3.5 3.8 3.6 1.1
Source of basic data: National Statistics Office
2 0 1 0 2 0 1 2
2 0 1 2
2 0 1 2
2 0 1 1
Quarter-on-Quarter Change (in percent)
2 0 1 0 2 0 1 1
Year-on-Year Change (in percent)
2 0 1 0 2 0 1 1
4b CONSUMER PRICE INDEX IN AREAS OUTSIDE METRO MANILA(2000=100)
for periods indicated
(2006=100)
Quarterly Average
2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
ALL ITEMS 120.3 121.3 122.3 123.2 125.8 127.6 128.4 129.3 129.8 131.6 132.9 133.2 134.4
FOOD AND NON-ALCHOLIC BEVERAGES 128.8 129.4 130.9 132.4 136.3 137.4 138.0 139.2 139.3 140.2 142.1 142.7 143.1
FOOD ITEMS 129.7 130.3 131.8 133.5 137.5 138.6 139.2 140.5 140.4 141.4 143.3 143.9 144.2
ALCOHOLIC BEVERAGES, TOBACCO AND NARCOTICS 115.7 116.2 116.8 117.5 120.4 123.0 124.7 125.6 126.8 129.6 130.8 131.6 162.1
NON-FOOD 114.0 115.2 115.8 116.4 118.1 120.3 121.5 122.0 122.8 125.1 125.7 126.1 126.7
CLOTHING AND FOOTWEAR 112.3 113.0 113.8 114.6 115.8 117.4 118.6 119.5 120.2 122.7 123.9 124.4 125.4
HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 112.8 114.9 115.3 115.9 118.2 121.2 121.9 122.5 124.1 127.3 128.4 127.9 128.4
FURNISHINGS, HOUSEHOLD EQUIPMENT
AND ROUTING MAINTENANCE OF THE HOUSE 114.0 114.9 115.3 115.9 116.9 118.2 119.0 119.5 120.2 122.9 124.0 124.7 125.3
HEALTH 118.4 119.1 120.0 120.7 121.7 122.9 124.0 124.6 125.1 127.0 128.0 128.5 129.1
TRANSPORT 117.9 118.7 119.0 119.6 122.9 126.4 127.1 127.4 128.4 130.0 129.1 129.5 130.0
COMMUNICATION 92.1 92.2 92.2 92.1 92.0 92.0 92.0 91.8 91.8 91.9 92.0 92.0 92.1
RECREATION AND CULTURE 104.3 104.6 104.9 104.9 105.2 106.2 107.1 107.4 107.7 108.7 109.2 109.4 109.8
EDUCATION 120.3 121.8 125.0 125.6 125.7 127.7 131.9 132.0 132.1 134.2 138.3 138.3 138.3
RESTAURANTS AND MISCELLANEOUS GOODS AND SERVICES 116.6 117.6 117.8 118.2 119.2 120.3 121.4 122.1 122.5 124.3 125.2 125.8 126.8
2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
ALL ITEMS 1.1 0.9 0.8 0.8 2.1 1.4 0.7 0.7 0.4 1.4 1.0 0.3 0.9
FOOD AND NON-ALCHOLIC BEVERAGES 1.2 0.4 1.2 1.1 2.9 0.8 0.4 0.9 0.0 0.7 1.3 0.4 0.3
FOOD ITEMS 1.3 0.5 1.2 1.2 3.0 0.8 0.5 1.0 -0.1 0.7 1.3 0.4 0.2
ALCOHOLIC BEVERAGES, TOBACCO AND NARCOTICS 1.2 0.5 0.5 0.7 2.5 2.1 1.4 0.7 1.0 2.2 0.9 0.6 23.1
NON-FOOD 1.1 1.1 0.5 0.5 1.5 1.9 1.0 0.4 0.7 1.8 0.5 0.4 0.4
CLOTHING AND FOOTWEAR 0.7 0.7 0.7 0.7 1.0 1.4 1.1 0.7 0.6 2.1 1.0 0.4 0.8
HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 1.5 1.8 0.4 0.5 2.0 2.5 0.6 0.5 1.3 2.5 0.9 -0.4 0.4
FURNISHINGS, HOUSEHOLD EQUIPMENT
AND ROUTING MAINTENANCE OF THE HOUSE 1.0 0.7 0.4 0.5 0.9 1.1 0.7 0.4 0.6 2.2 0.9 0.5 0.5
HEALTH 1.6 0.6 0.7 0.6 0.8 1.0 0.9 0.5 0.4 1.5 0.7 0.4 0.5
TRANSPORT 1.0 0.7 0.3 0.5 2.7 2.9 0.5 0.2 0.8 1.2 -0.7 0.3 0.4
COMMUNICATION -1.1 0.1 0.0 -0.1 -0.1 0.0 0.0 -0.1 -0.1 0.1 0.1 0.0 0.1
RECREATION AND CULTURE -0.2 0.3 0.3 0.0 0.3 0.9 0.9 0.3 0.3 0.9 0.5 0.2 0.4
EDUCATION 0.6 1.3 2.7 0.4 0.1 1.6 3.3 0.1 0.1 1.6 3.1 0.0 0.0
RESTAURANTS AND MISCELLANEOUS GOODS AND SERVICES 1.2 0.9 0.1 0.4 0.8 0.9 0.9 0.5 0.3 1.5 0.8 0.5 0.8
2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
ALL ITEMS 4.0 3.9 3.9 3.6 4.6 5.2 5.0 5.0 3.2 3.1 3.5 3.0 3.5
FOOD AND NON-ALCHOLIC BEVERAGES 4.5 3.8 4.5 4.0 5.8 6.2 5.4 5.2 2.2 2.1 3.0 2.5 2.7
FOOD ITEMS 4.7 3.9 4.6 4.2 6.0 6.4 5.6 5.3 2.2 2.0 2.9 2.4 2.7
ALCOHOLIC BEVERAGES, TOBACCO AND NARCOTICS 3.7 3.1 2.9 2.8 4.1 5.8 6.8 6.8 5.3 5.4 4.9 4.8 27.8
NON-FOOD 3.6 3.9 3.4 3.1 3.6 4.4 4.9 4.8 4.0 4.0 3.4 3.4 3.1
CLOTHING AND FOOTWEAR 2.2 2.3 2.5 2.8 3.1 3.9 4.2 4.2 3.8 4.5 4.4 4.1 4.3
HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 3.9 5.1 4.6 4.3 4.8 5.5 5.7 5.7 5.0 5.0 5.3 4.4 3.4
FURNISHINGS, HOUSEHOLD EQUIPMENT
AND ROUTING MAINTENANCE OF THE HOUSE 2.7 2.8 2.8 2.6 2.5 2.9 3.2 3.1 2.9 4.0 4.2 4.4 4.2
HEALTH 3.9 3.7 3.6 3.6 2.8 3.2 3.3 3.2 2.8 3.4 3.2 3.1 3.2
TRANSPORT 5.1 4.0 2.4 2.5 4.2 6.5 6.8 6.5 4.5 2.8 1.6 1.7 1.3
COMMUNICATION -0.7 -0.8 -0.8 -1.1 -0.1 -0.2 -0.3 -0.3 -0.2 -0.1 0.0 0.2 0.4
RECREATION AND CULTURE 0.8 0.7 0.5 0.4 0.9 1.5 2.1 2.4 2.4 2.3 1.9 1.8 1.9
EDUCATION 4.8 4.8 4.7 5.0 4.5 4.8 5.5 5.1 5.1 5.1 4.9 4.7 4.7
RESTAURANTS AND MISCELLANEOUS GOODS AND SERVICES 3.3 3.6 3.0 2.7 2.3 2.3 3.1 3.2 2.7 3.3 3.1 3.0 3.5
Source of basic data: National Statistics Office
Quarter-on-Quarter Change (in percent)
2 0 1 2
2 0 1 22 0 1 0
2 0 1 0 2 0 1 1
2 0 1 0
Year-on-Year Change (in percent)
2 0 1 2
2 0 1 1
2 0 1 1
5 MONETARY INDICATORS (DCS CONCEPT) P
as of periods indicated
in billion pesos
2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
A. Liquidity
1. M4 (2+7) 5,326.5 5,473.4 5,371.8 5,680.3 5,546.6 5,755.5 5,694.0 6,162.9 6,127.6
2. M3 : Broad Money Liabilities (3+6) 4,293.8 4,423.8 4,356.5 4,674.3 4,535.9 4,738.2 4,682.1 5,171.7 5,139.1
3. M2 (4+5) 4,201.7 4,327.5 4,262.3 4,586.3 4,446.4 4,634.1 4,619.1 5,085.7 5,043.3
4. M1: Currency Outside Depository Corporations and Transferable Deposits (Narrow Money ) 1,319.0 1,323.6 1,347.6 1,492.4 1,470.1 1,448.7 1,455.6 1,603.5 1,654.7
Currency Outside Depository Corporations (Currency in Circulation) 431.8 428.1 433.5 518.6 475.7 466.2 468.3 557.5 540.6
Transferable Deposits (Demand Deposits) 887.3 895.4 914.1 973.9 994.4 982.5 987.3 1,046.0 1,114.1
5. Quasi-Money 2,882.7 3,004.0 2,914.7 3,093.9 2,976.3 3,185.4 3,163.5 3,482.2 3,388.6
Savings Deposits Savings Deposits 1,798.2 1,878.2 1,879.4 2,020.4 1,966.9 2,038.9 2,075.3 2,213.3 2,259.8
Time Deposits Time Deposits 1,084.5 1,125.8 1,035.3 1,073.5 1,009.4 1,146.6 1,088.1 1,268.9 1,128.8
6. Securities Other Than Shares Included in Broad Money (Deposit Substitutes) 92.0 96.3 94.2 87.9 89.4 104.1 63.0 86.0 95.8
7. Transferable & Other Deposits in Foreign Currency (FCDU Deposits-Residents) 1,032.7 1,049.5 1,015.4 1,006.1 1,010.8 1,017.2 1,012.0 991.2 988.5
8. Liabilities Excluded from Broad-Money (Other Liabilities) 50.4 51.3 53.1 65.4 68.9 67.5 41.5 57.7 62.3
Bills Payable 48.5 49.4 51.2 63.5 67.0 67.0 40.6 56.9 61.4
Restricted Deposits 1.9 1.9 1.9 1.9 1.9 0.5 0.8 0.8 0.8
B. Credits
1. Net Domestic Assets 2,473.5 2,485.5 2,164.5 2,494.6 2,370.1 2,629.5 2,433.0 2,973.9 2,970.5
Bangko Sentral ng Pilipinas -2,278.3 -2,436.5 -2,747.5 -2,635.9 -2,671.1 -2,630.4 -2,846.4 -2,713.4 -2,756.9
Other Depository Corporations 4,751.8 4,922.0 4,911.9 5,130.5 5,041.2 5,259.9 5,279.4 5,687.3 5,727.5
2. Net Claims on Residents (Net Domestic Credits) 4,292.2 4,430.5 4,532.9 4,945.4 4,828.9 5,048.3 5,075.7 5,330.8 5,584.6
By End-User
Net Claims on the Public Sector (Public Sector) 1,371.1 1,313.8 1,319.2 1,554.4 1,362.2 1,387.7 1,401.1 1,336.9 1,566.9
Claims on Other Sectors (Private Sector) 2,921.0 3,116.7 3,213.8 3,391.1 3,466.7 3,660.6 3,674.6 3,993.8 4,017.7
By Institution
Bangko Sentral ng Pilipinas 110.7 -10.0 8.3 241.3 -12.5 24.8 74.5 -51.8 104.8
Other Depository Corporations 4,181.5 4,440.5 4,524.7 4,704.2 4,841.5 5,023.5 5,001.2 5,382.6 5,479.8
3. Net Other Items -1,818.7 -1,945.0 -2,368.5 -2,450.8 -2,458.9 -2,418.8 -2,642.7 -2,356.8 -2,614.1
C. Net Foreign Assets 2,903.4 3,039.2 3,260.5 3,251.1 3,245.4 3,193.5 3,302.6 3,246.7 3,219.3
Bangko Sentral ng Pilipinas 2,843.0 2,971.6 3,272.3 3,287.5 3,250.0 3,200.7 3,406.5 3,426.9 3,418.0
Net International Reserves 2,863.6 2,991.8 3,292.0 3,307.1 3,268.0 3,218.4 3,423.3 3,443.5 3,434.6
Foreign Assets 2,864.2 2,991.9 3,292.5 3,307.2 3,268.5 3,218.5 3,423.8 3,443.6 3,435.1
Foreign Liabilities 0.6 0.2 0.6 0.1 0.6 0.1 0.5 0.1 0.5
Medium & Long-Term Foreign Liabilities 20.6 20.2 19.7 19.6 18.0 17.6 16.8 16.6 16.6
Other Depository Corporations 60.4 67.5 -11.8 -36.3 -4.5 -7.2 -103.9 -180.2 -198.6
Foreign Assets 659.3 639.8 667.8 599.1 618.4 632.1 620.7 593.2 572.0
Foreign Liabilities 598.9 572.2 679.6 635.4 622.9 639.3 724.6 773.4 770.7
PPreliminary
Note: Details may not add up to totals due to rounding.
Source : Bangko Sentral ng Pilipinas
20122011
6 SELECTED DOMESTIC INTEREST RATES
for periods indicated; in percent per annum
NOMINAL INTEREST RATES REAL INTEREST RATES 1/
2010 2011 2012 2013 2010 2011 2012 2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
1st
Qtr 2nd
Qtr 3rd
Qtr 4.0729
3.1 2.9 3.5 3 3.2
Interbank Call Loans 4.1707 4.2593 4.1819 4.2416 4.2491 4.6535 4.6849 4.6661 4.3456 4.1547 3.9554 3.6832 3.0555 0.2707 0.4593 0.2819 0.6416 -0.2509 -0.2465 -0.0151 -0.0339 1.2456 1.2547 0.4554 0.6832 -0.1445
Savings Deposits 1.6580 1.5640 1.5840 1.5940 1.5490 1.5920 1.7800 1.5580 1.5180 1.2940 1.2910 1.2640 1.1130 -2.2420 -2.2360 -2.3160 -2.0060 -2.9510 -3.3080 -2.9200 -3.1420 -1.5820 -1.6060 -2.2090 -1.7360 -2.0870
Time Deposits (All Maturities) 3.0610 2.9220 3.0050 2.9740 2.6150 2.8880 2.9120 2.9400 2.7420 2.8370 2.7740 2.9340 2.3730 -0.8390 -0.8780 -0.8950 -0.6260 -1.8850 -2.0120 -1.7880 -1.7600 -0.3580 -0.0630 -0.7260 -0.0660 -0.8270
Manila Reference Rates (All Maturities) 2
4.8125 4.8125 4.8750 4.8125 4.7500 4.6875 4.8750 4.8750 5.0625 4.9375 4.5625 3.4375 3.0000 0.9125 1.0125 0.9750 1.2125 0.2500 -0.2125 0.1750 0.1750 1.9625 2.0375 1.0625 0.4375 -0.2000
Lending Rates
8.9229 8.8744 8.8809 8.1141 7.5010 7.6660 7.9797 7.8408 7.9840 8.0219 7.8091 7.5378 7.1142 5.0229 5.0744 4.9809 4.5141 3.0010 2.7660 3.2797 3.1408 4.8840 5.1219 4.3091 4.5378 3.9142
6.8231 6.6932 6.6742 5.9971 5.3930 5.5488 5.8310 5.6983 5.6636 5.7576 5.5490 5.2894 4.8584 2.9231 2.8932 2.7742 2.3971 0.8930 0.6488 1.1310 0.9983 2.5636 2.8576 2.0490 2.2894 1.6584
7.8860 7.7420 7.6460 7.4080 6.8320 6.5550 7.0080 6.2200 6.0510 5.7040 5.4840 5.4550 5.8420 3.9860 3.9420 3.7460 3.8080 2.3320 1.6550 2.3080 1.5200 2.9510 2.8040 1.9840 2.4550 2.6420
Bangko Sentral Rates
6.0000 N.T. N.T. N.T. 6.0000 6.2500 6.5000 N.T. 6.5000 N.T. 5.7500 N.T. N.T. 2.1000 N.T. N.T. N.T. 1.5000 1.3500 1.8000 N.T. 3.4000 N.T. 2.2500 N.T. N.T.
N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T.
4.0000 4.0000 4.0000 4.0000 4.0227 4.4066 4.5000 4.5000 4.2205 4.0000 3.8192 3.5000 3.5000 0.1000 0.2000 0.1000 0.4000 -0.4773 -0.4934 -0.2000 -0.2000 1.1205 1.1000 0.3192 0.5000 0.3000
N.T. 4.0794 N.T. 4.1011 4.0625 4.5748 N.T. 4.5994 N.T. 4.0696 3.9512 3.6786 3.5850 N.T. 0.2794 N.T. 0.5011 -0.4375 -0.3252 N.T. -0.1006 N.T. 1.1696 0.4512 0.6786 0.3850
3.8333 4.0000 4.0000 4.0000 4.0140 4.4057 4.5000 4.5000 4.1997 4.0000 3.8310 3.5760 3.5000 -0.0667 0.2000 0.1000 0.4000 -0.4860 -0.4943 -0.2000 -0.2000 1.0997 1.1000 0.3310 0.5760 0.3000
Rate on Government Securities
Treasury Bills, All Maturities 4.2270 4.1550 4.3270 3.2130 2.3360 1.7700 1.7610 1.2920 2.2200 2.4400 1.9870 0.7160 0.4740 0.3270 0.3550 0.4270 -0.3870 -2.1640 -3.1300 -2.9390 -3.4080 -0.8800 -0.4600 -1.5130 -2.2840 -2.7260
3.9050 3.8710 3.9630 2.6260 1.1670 1.4550 1.4850 1.1480 1.8840 2.3340 1.4580 0.3450 0.0590 0.0050 0.0710 0.0630 -0.9740 -3.3330 -3.4450 -3.2150 -3.5520 -1.2160 -0.5660 -2.0420 -2.6550 -3.1410
4.1220 4.0900 4.2780 3.1420 2.0640 1.0830 1.8050 1.2690 2.2080 2.3080 1.8250 0.6790 0.3000 0.2220 0.2900 0.3780 -0.4580 -2.4360 -3.8170 -2.8950 -3.4310 -0.8920 -0.5920 -1.6750 -2.3210 -2.9000
4.5160 4.4850 4.5200 3.4490 2.9060 2.3820 1.8940 1.4150 2.6110 2.5310 2.2280 0.8270 0.7000 0.6160 0.6850 0.6200 -0.1510 -1.5940 -2.5180 -2.8060 -3.2850 -0.4890 -0.3690 -1.2720 -2.1730 -2.5000
Government Securities in the Secondary Market 5
2.6000 2.8000 3.6000 2.9000 3.2000
3 Months 3.9865 4.0865 4.1742 1.3192 1.2231 3.0731 2.9627 1.6581 2.5212 2.3812 0.8038 0.4865 0.4021 0.0865 0.4865 0.3742 -2.2808 -3.6769 -2.1269 -1.7373 -2.5419 -0.0788 -0.4188 -2.7962 -2.4135 -2.7979
6 Months 4.1396 4.3135 4.4135 1.8077 1.4158 3.1692 2.2231 1.7542 2.5327 2.4885 1.2042 0.7885 0.4677 0.2396 0.7135 0.6135 -1.7923 -3.4842 -2.0308 -2.4769 -2.4458 -0.0673 -0.3115 -2.3958 -2.1115 -2.7323
1-Year 4.4577 4.6996 4.6012 2.5192 2.4785 3.2842 1.7269 1.9715 3.1665 2.6419 1.6885 0.9885 0.8729 0.5577 1.0996 0.8012 -1.0808 -2.4215 -1.9158 -2.9731 -2.2285 0.5665 -0.1581 -1.9115 -1.9115 -2.3271
2-Years 4.8308 5.2769 5.0865 3.4846 4.5012 4.1362 3.0269 2.6673 3.3462 3.1385 2.7250 3.0577 2.5729 0.9308 1.6769 1.2865 -0.1154 -0.3988 -1.0638 -1.6731 -1.5327 0.7462 0.3385 -0.8750 0.1577 -0.6271
3-Years 5.2135 5.4923 5.1846 4.2288 5.2942 4.6146 3.8923 3.4423 3.8038 3.9135 3.9077 3.8258 2.8625 1.3135 1.8923 1.3846 0.6288 0.3942 -0.5854 -0.8077 -0.7577 1.2038 1.1135 0.3077 0.9258 -0.3375
4-Years 5.8962 5.9404 5.2538 4.5019 5.9615 5.0265 5.1235 4.7885 4.7596 4.6462 4.4692 3.9865 2.9792 1.9962 2.3404 1.4538 0.9019 1.0615 -0.1735 0.4235 0.5885 2.1596 1.8462 0.8692 1.0865 -0.2208
5-Years 6.4190 6.4058 5.4738 5.0308 6.0481 5.1865 5.5308 5.0823 4.8250 5.1058 4.7096 4.1058 3.0708 2.5190 2.8058 1.6738 1.4308 1.1481 -0.0135 0.8308 0.8823 2.2250 2.3058 1.1096 1.2058 -0.1292
7-Years 7.1862 7.2423 5.8519 5.3719 6.7165 5.8704 5.4519 5.2650 5.1462 5.1673 4.8462 4.1385 3.2937 3.2862 3.6423 2.0519 1.7719 1.8165 0.6704 0.7519 1.0650 2.5462 2.3673 1.2462 1.2385 0.0937
10-Years 8.0400 7.9291 6.2327 6.1000 7.2062 6.5585 6.2269 5.4135 5.7962 5.9192 4.8962 4.4000 3.5292 4.1400 4.3291 2.4327 2.5000 2.3062 1.3585 1.5269 1.2135 3.1962 3.1192 1.2962 1.5000 0.3292
20-Years 9.1077 8.8858 8.0981 8.1692 8.2308 8.2212 7.4750 6.5827 6.0072 6.0227 5.8487 5.9692 3.8146 5.2077 5.2858 4.2981 4.5692 3.3308 3.0212 2.7750 2.3827 3.4072 3.2227 2.2487 3.0692 0.6146
25-Years 9.2096 9.1365 8.1673 8.1727 8.0765 8.2000 7.6654 6.5731 6.4469 6.3827 6.0454 5.8962 4.1396 5.3096 5.5365 4.3673 4.5727 3.1765 3.0000 2.9654 2.3731 3.8469 3.5827 2.4454 2.9962 0.9396
1Nominal interest rate less inflation rate
2Refers to the New Manila Reference Rates based on combined transactions on time deposits and promissory notes of reporting commercial banks
3Refers to the weighted average interest rate of reporting commercial banks' interest incomes on their outstanding peso-denominated loans
4Weighted average of transacted rates
5End of Period
pPreliminary
N.T. - No transactions
Source: Bangko Sentral ng Pilipinas
364-Days
R/P (Term) 4
RR/P (Overnight) 4
RR/P (Term) 4
Rediscounting
91-Days
182-Days
Low
All Maturities 3
R/P (Overnight) 4
High
7 NUMBER OF FINANCIAL INSTITUTIONS 1
as of periods indicated
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Mar Jun Sep Dec March June September Dec
T o t a l 25,078 25,544 25,828 26,173 26,515 26,787 26,745 27,198
Head Offices 7,379 7,411 7,433 7,418 7,436 7,424 7,271 7,245
Branches/Agencies 17,699 18,133 18,395 18,755 19,079 19,363 19,474 19,953
Banks 8,870 8,915 8,965 9,050 9,186 9,207 9,301 9,410
Head Offices 746 739 730 726 723 712 705 696
Branches/Agencies 8,124 8,176 8,235 8,324 8,463 8,495 8,596 8,714
Universal and Commercial Banks 4,695 4,764 4,813 4,857 4,904 4,965 5,028 5,145
Head Offices 38 38 38 38 38 37 37 37
Branches/Agencies 4,657 4,726 4,775 4,819 4,866 4,928 4,991 5,108
Thrift Banks 1,419 1,381 1,394 1,491 1,545 1,522 1,545 1,619
Head Offices 73 72 70 71 71 69 69 70
Branches/Agencies 1,346 1,309 1,324 1,420 1,474 1,453 1,476 1,549
Savings and Mortgage Banks 894 854 887 979 1,007 1,003 1,020 1,052
Head Offices 28 27 27 28 28 28 28 28
Branches/Agencies 866 827 860 951 979 975 992 1,024
Private Development Banks 357 358 340 344 367 341 346 385
Head Offices 20 20 19 19 19 18 18 19
Branches/Agencies 337 338 321 325 348 323 328 366
Stock Savings and Loan Assns. 141 142 140 141 144 150 151 154
Head Offices 22 22 21 21 21 20 20 20
Branches/Agencies 119 120 119 120 123 130 131 134
Microfinance Banks 27 27 27 27 27 28 28 28
Head Offices 3 3 3 3 3 3 3 3
Branches/Agencies 24 24 24 24 24 25 25 25
Rural Banks 2,756 2,770 2,758 2,702 2,737 2,720 2,728 2,646
Head Offices 635 629 622 617 614 606 599 589
Branches/Agencies 2,121 2,141 2,136 2,085 2,123 2,114 2,129 2,057
(continued next page)
20122011
7 NUMBER OF FINANCIAL INSTITUTIONS 1
(Continuation)
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Non-Banks 16,208 16,629 16,863 17,123 17,329 17,580 17,444 17,788
Head Offices 6,633 6,672 6,703 6,692 6,713 6,712 6,566 6,549
Branches/Agencies 9,575 9,957 10,160 10,431 10,616 10,868 10,878 11,239
Investment Houses 28 28 28 27 27 27 27 27
Head Offices 18 18 18 17 17 17 17 17
Branches/Agencies 10 10 10 10 10 10 10 10
Finance Companies 47 47 47 47 46 85 85 87
Head Offices 21 21 21 21 20 20 20 20
Branches/Agencies 26 26 26 26 26 65 65 67
Investment Companies 4 4 4 4 4 4 4 3
Head Offices 4 4 4 4 4 4 4 3
Branches/Agencies - - - - - - - -
Securities Dealers/Brokers 14 14 14 14 14 13 13 13
Head Offices 14 14 14 14 14 13 13 13
Branches/Agencies - - - - - - - -
Pawnshops 15,818 16,239 16,467 16,729 16,936 17,128 16,992 17,335
Head Offices 6,381 6,420 6,451 6,442 6,464 6,463 6,317 6,301
Branches/Agencies 9,437 9,819 10,016 10,287 10,472 10,665 10,675 11,034
Lending Investors 2 2 1 1 1 1 1 1
Head Offices 2 2 1 1 1 1 1 1
Branches/Agencies - - - - - - - -
Non-Stock Savings and Loan Assns. 167 167 174 174 174 195 195 195
Head Offices 69 69 70 70 70 71 71 71
Branches/Agencies 98 98 104 104 104 124 124 124
Private Insurance Companies 2
119 119 119 119 119 119 119 119
Head Offices 115 115 115 115 115 115 115 115
Branches/Agencies 4 4 4 4 4 4 4 4
Government Non-Banks 4 4 4 4 4 4 4 4
Head Offices 4 4 4 4 4 4 4 4
Branches/Agencies - - - - - - - -
Venture Capital Corporations - - - - - - - -
Head Offices - - - - - - - -
Branches/Agencies - - - - - - - -
Credit Card Companies 4 4 4 3 3 3 3 3
Head Offices 4 4 4 3 3 3 3 3
Branches/Agencies - - - - - - - -
Other Non-Bank with QBF 1 1 1 1 1 1 1 1
Head Offices 1 1 1 1 1 1 1 1
Branches/Agencies - - - - - - - -
1 Refers to the number of financial establishments which includes the head offices and branches; excludes the Bangko Sentral ng Pilipinas
Starting Q4 2009, data include other banking offices per Circular 505 and 624 dated 22 December 2005 and 13 October 2008, respectively.
(Other banking offices refer to any office or place of business in the Philippines other than the head office, branch or extension offfice, which primarily
engages in banking activities other than the acceptance of deposits and/or servicing of withdrawals thru tellers or other authorized personnel.)2
Covers only the head offices and their foreign branches._
zero or nil
Source: Bangko Sentral ng Pilipinas
20122011
8 TOTAL RESOURCES OF THE PHILIPPINE FINANCIAL SYSTEM 1
as of periods indicated
in billion pesos
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Mar Jun Sep Dec Mar June September December
T o t a l 8,958.8 9,208.5 9,286.8 9,645.6 9,509.0 9,770.2 9,968.2p
10,476.0p
Banks 7,119.6 7,314.2 7,360.6 7,643.4 7,464.3 7,671.5 7,864.4 8,355.8
Universal and Commercial Banks 2
6,350.5 6,548.1 6,598.1 6,833.0 6,668.0 6,877.6 7,054.3 7,486.7
Thrift Banks 2
587.5
581.5
576.9
623.6 608.6 606.2 622.4 681.6
Rural Banks 181.7 184.6 185.6 186.8 187.8 187.6 187.6a
187.6a
Non-Banks 3
1,839.1 1,894.3 1,926.2 2,002.2 2,044.7 2,098.7 2,103.9 2,120.1
1 Excludes the Bangko Sentral ng Pilipinas; amount includes allowance for probable losses
2 Based on the new Financial Reporting Package that was implemented beginning March 2008, asset is valued gross of amortization, depreciation and allowance
for probable losses; prior to 2008, data were based on the Consolidated Statement of Condition which valued asset gross of allowance for probable losses and
net of amortization and depreciation.3 Includes Investment Houses, Finance Companies, Investment Companies, Securities Dealers/Brokers, Pawnshops, Lending Investors, Non Stocks Savings
and Loan Associations, Venture Capital Corps., Credit Card Companies (which are under BSP supervision), and Private and Government Insurance
Companies (i.e., SSS and GSIS). a
As of end-June 2012p
Preliminary
Notes: Data on Non-Banks are based on Consolidated Statement of Condition (CSOC).
Data on Rural Banks are based on CSOC up to September 2010. Data from October 2010 onwards are based on FRP for some rural banks and
CSOC for other rural banks. Details may not add up to total due to rounding off.
Source: Bangko Sentral ng Pilipinas
(2)
2011
Institutions
2012
(3)
(1)
9 RATIO OF NON-PERFORMING LOANS (NPL) AND LOAN LOSS PROVISIONS
TO TOTAL LOANS OF THE BANKING SYSTEM
end-of-period
in percent
UBs &KBs TBs RBs Total UBs &KBs TBs RBs Total
2006
Mar 8.007 9.596 12.026 8.290 6.294 4.601 4.134 6.063
Jun 7.391 9.205 12.075 7.733 5.919 4.930 4.071 5.756
Sep 7.431 8.771 11.626 7.722 6.120 4.811 3.991 5.905
Dec 5.662 8.220 10.867 6.108 4.679 4.055 4.589 4.611
2007
Mar 5.275 7.267 10.924 5.704 4.285 3.667 3.879 4.199
Jun 5.208 7.864 10.568 5.720 4.370 3.969 3.679 4.297
Sep 5.191 7.461 9.859 5.637 4.604 3.712 3.393 4.451
Dec 4.448 6.846 9.820 4.929 4.151 3.235 3.579 4.025
2008
Mar 4.524 6.649 9.697 4.990 4.220 3.231 3.524 4.075
Jun 4.010 6.569 9.809 4.500 3.876 3.240 3.612 3.798
Sep 4.030 6.606 10.131 4.530 3.825 3.485 3.810 3.787
Dec 3.524 6.622 9.973 4.061 3.524 3.548 3.792 3.536
2009
Mar 3.562 7.685 10.689 4.227 3.537 3.754 4.023 3.575
Jun 3.360 7.467 10.754 4.039 3.438 3.939 4.136 3.514
Sep 3.249 8.436 10.585 4.024 3.615 4.201 4.100 3.691
Dec 2.969 7.272 10.414 3.640 3.335 3.760 4.052 3.401
2010
Mar 3.215 7.849 9.425 3.928 3.634 3.958 4.409 3.696
Jun 3.268 7.928 9.418 3.957 3.557 4.206 4.567 3.657
Sep 3.113 8.213 9.629 3.880 3.646 4.227 4.635 3.741
Dec 2.863 7.322 9.884 3.577 3.392 3.929 4.920 3.499
2011
Mar 2.986 7.306 10.105 3.718 3.594 4.693 5.096 3.769
Jun 2.446 6.183 10.190 3.101 3.087 3.648 5.107 3.214
Sep 2.460 6.228 9.968 3.112 3.043 3.736 5.175 3.189
Dec 2.233 5.721 10.138 2.848 2.821 3.374 5.106 2.952
2012p
Mar 2.361 5.823 10.463 3.007 2.950 3.842 5.367 3.128
Jun 2.058 4.972 10.632 2.650 2.808 3.557 5.663 2.981
Sep 2.050 5.422 10.624a
2.675 2.789 3.634 6.073a
2.982
Dec 1.866 5.337 10.624a
2.503 2.636 3.447 6.073a
2.827
pPreliminary
aRural banks' data as of end-September 2012
Source: SDC/DES
TOTAL LOAN PROVISIONS/TOTAL LOANSTOTAL NPL/TOTAL LOANS
10 STOCK MARKET TRANSACTIONS
volume in million shares, value in million pesos
2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Volume 144561.7 232516.1 431850.7 247667.2 402134.6 152893.3 116967.0 371124.2 165037.1
Financials 649.8 629.8 1437.0 1407.0 1619.1 1153.4 991.1 1434.9 1816.0
Industrial 6459.5 5767.2 29367.4 7523.8 31502.6 13358.4 16362.0 81440.2 18622.2
Holding Firms 23546.0 11491.6 22863.9 10799.8 21750.9 7081.5 9092.3 143645.9 33659.4
Property 19404.6 13990.8 18584.9 12717.7 25507.1 18144.9 14136.5 18676.1 22018.6
Services 5078.6 4239.7 18563.1 16441.6 14404.0 10480.3 15809.8 44604.6 23393.8
Mining & Oil 89423.2 196397.0 341034.3 198775.4 307350.8 102674.8 60575.1 81321.3 65526.8
SME 0.1 0.0 0.2 1.9 0.1 0.0 0.2 1.3 0.3
Value 325016.4 336795.1 384522.4 376257.4 502081.1 445647.9 359916.2 464065.9 623481.1
Financials 31968.1 34907.8 49817.9 53460.4 74928.9 60289.2 51589.3 96175.3 101610.0
Industrial 100461.7 92832.9 107984.7 72814.8 114995.4 132721.2 69893.6 101501.5 125900.6
Holding Firms 74750.5 79750.3 63531.9 70700.1 106954.1 104977.4 87474.2 101072.6 167327.0
Property 39979.0 35069.7 39404.4 35773.0 58562.3 52982.6 65675.3 66954.9 108603.6
Services 53189.5 47266.2 44127.9 91303.8 78836.7 59063.5 67397.3 81771.9 91251.0
Mining & Oil 24667.6 46968.0 79655.1 52200.9 67803.3 35614.0 17885.4 16579.0 28786.2
SME 0.1 0.1 0.8 4.4 0.5 0.0 1.1 10.7 2.7
Composite Index (end of period) 4055.1 4291.2 3999.7 4372.0 5107.7 5246.4 5346.1 5812.7 6847.5
Sum of details may not add up to totals due to rounding.
Source : Philippine Stock Exchange
20122011
11 PHILIPPINES: BALANCE OF PAYMENTS
in million U.S. dollars
2013 p Y-o-Y
Q1 Q2 Q3 Q4 Q1 Growth (%)
Current Account 393 2276 2249 2208 3439 775.1
Export 21488 23470 23914 23504 22783 6.0
Import 21095 21194 21665 21296 19344 -8.3
Goods, Services, and Primary Income -3913 -2486 -2616 -3031 -1017 74.0
Export 17045 18592 18913 18108 18186 6.7
Import 20958 21078 21529 21139 19203 -8.4
Goods and Services -3256 -2540 -2244 -3260 -914 71.9
Export 15170 16657 16945 16112 16288 7.4
Import 18426 19197 19189 19372 17202 -6.6
Goods -4787 -2696 -3021 -4701 -2733 42.9
Credit: Exports 10339 12692 12262 10991 11152 7.9
Debit: Imports 15126 15388 15283 15692 13885 -8.2
Services 1531 156 777 1441 1819 18.8
Credit: Exports 4831 3965 4683 5121 5136 6.3
Debit: Imports 3300 3809 3906 3680 3317 0.5
Primary Income -657 54 -372 229 -103 84.3
Credit: Receipts 1875 1935 1968 1996 1898 1.2
Debit: Payments 2532 1881 2340 1767 2001 -21.0
Secondary Income 4306 4762 4865 5239 4456 3.5
Credit: Receipts 4443 4878 5001 5396 4597 3.5
Debit: Payments 137 116 136 157 141 2.9
Capital Account 25 30 33 48 23 -8.0
Credit: Receipts 28 33 40 51 28 0.0
Debit: Payments 3 3 7 3 5 66.7
Financial Account -4821 722 510 -2542 -1489 69.1
Net Acquisition of Financial Assets -1584 1075 3567 1076 721 145.5
Net Incurrence of Liabilities 3237 353 3057 3618 2210 -31.7
Direct Investment -898 80 -42 -92 -814 9.4
Net Acquisition of Financial Assets 526 629 317 373 489 -7.0
Net Incurrence of Liabilities 1424 549 359 465 1303 -8.5
Portfolio Investment -1248 -363 -61 -1851 -3123 -150.2
Net Acquisition of Financial Assets 786 -50 423 45 -771 -198.1
Net Incurrence of Liabilities 2034 313 484 1896 2352 15.6
Financial Derivatives -60 2 18 27 52 186.7
Net Acquisition of Financial Assets -125 -59 -56 -36 -46 63.2
Net Incurrence of Liabilities -65 -61 -74 -63 -98 -50.8
Other Investment -2615 1003 595 -626 2396 191.6
Net Acquisition of Financial Assets -2771 555 2883 694 1049 137.9
Net Incurrence of Liabilities -156 -448 2288 1320 -1347 -763.5
NET UNCLASSIFIED ITEMS -3996 -1511 2743 -1393 -3416 14.5
OVERALL BOP POSITION 1243 73 4515 3405 1535 23.5
Debit: Change in Reserve Assets 1253 62 4526 3394 1546 23.4
Credit: Change in Reserve Liabilities 10 -11 11 -11 11 10.0
Use of Fund Credits 0 0 0 0 0 0.0
Short-term 10 -11 11 -11 11 10.0
p - Preliminary
Technical Notes:
1. Balance of Payments Statistics from 2011 onwards are revised based on the IMF's Balance of Payments and International Investment
Position Manual, 6th Edition.
2. Financial Account, including Reserve Assets, is calculated as the sum of net acquisitions of financial assets less net incurrence of liabilities.
3. Balances in the current and capital accounts are derived by deducting debit entries from credit entries.
4. Balances in the financial account are derived by deducting net incurrence of liabilities from net acquisition of financial assets.
5. Negative values of Net Acquisition of Financial Assets indicate withdrawal/disposal of financial assets; negative values of Net
Incurrence of Liabilities indicate repayment of liabilities.
6. Overall BOP position is calculated as the change in the country's net international reserves (NIR), less non-economic transactions (revaluation
and gold monetization/demonetization). Alternatively, it can be derived by adding the current and capital account balances
less financial account plus net unclassified items.
7. Net unclassified items is an offsetting account to the overstatement or understatement in either receipts or payments of the recorded BOP
components vis-à-vis the overall BOP position.
8. Data on Deposit-taking corporations, except the central bank consist of transactions of commercial and thrift banks and offshore banking
units (OBUs).
2012
11a EXPORTS BY MAJOR COMMODITY GROUP
for periods indicated
volume in 000 metric tons; unit price in U.S.$/m.t.; fob value in million U.S. dollars; growth rates in percent
C o m m o d i t i e s Volume Price 4/
Value Volume Price 4/
Value Volume Price 4/
Value Volume Price 4/
Value Volume Price 4/
Value Volume Price Value
Coconut Products 328 378 322 336 433 32.0
Copra .. 1179 -- .. 1397 -- .. 538 -- .. 1166 -- .. 1069 -- 0.0 -9.3 0.0
Coconut Oil 171 1420 242 224 1313 294 217 1111 241 246 969 238 357 896 320 108.8 -36.9 32.2
Desiccated Coconut 26 2506 66 24 2203 54 12 3210 37 6 6519 39 4 10849 44 -84.6 332.9 -33.3
Copra Meal/Cake 61 205 12 112 195 22 152 250 38 122 409 50 136 459 63 123.0 123.9 425.0
Others 6 7 6 8 6 0.0
Sugar and Products 48 48 26 55 109 127.1
Centrifugal & Refined 76 533 40 81 557 45 45 516 9 .. 1090 -- 99 995 98 30.3 86.7 145.0
Molasses 70 93 6 6 122 1 12 143 2 36 344 12 34 280 10 -51.4 201.1 66.7
Others 1 2 1 43 1 0.0
Fruits and Vegetables 247 312 323 324 341 38.1
Canned Pineapple 54 984 53 51 1011 51 65 991 65 52 955 50 33 1020 34 -38.9 3.7 -35.8
Pineapple Juice 22 569 12 19 576 11 30 545 16 19 604 11 22 599 13 0.0 5.3 8.3
Pineapple Concentrates 6 1073 6 9 1295 12 7 1319 9 11 1411 16 7 1360 9 16.7 26.7 50.0
Bananas 431 262 113 636 250 159 693 262 181 886 218 193 694 298 207 61.0 13.7 83.2
Mangoes 5 741 4 8 798 7 4 851 3 1 1440 1 1 1270 1 -80.0 71.4 -75.0
Others 57 72 49 51 77 35.1
Other Agro-Based Products 203 222 184 197 261 28.6
Fish, Fresh or Preserved 25 4197 106 28 4373 122 21 4868 101 19 4779 90 22 5529 120 -12.0 31.7 13.2
Of which: Shrimps & Prawns 1 10880 9 1 9936 12 .. 10973 5 1 111 9 .. 137091 16 0.0 1160.0 77.8
Coffee, Raw, not Roasted .. 4607 -- .. 7088 -- 0 0 0 0 0 0 .. 0 -- 0.0 -100.0 0.0
Abaca Fibers 5 256 1 1 1382 2 3 612 2 1 715 1 2 777 1 -60.0 203.5 0.0
Tobacco,Unmanufactured 8 2627 21 7 2642 18 6 3040 17 6 3040 20 0 316715 30 -100.0 11956.1 42.9
Natural Rubber 8 1423 12 11 1418 15 10 1626 17 9 1929 18 9 2248 20 12.5 58.0 66.7
Ramie Fibers, Raw or Processed 0 0 0 .. 12947 0 0 0 0 0 0 0 0 0 0 0.0 0.0 0.0
Seaweeds, Dried 5 2519 13 6 1331 8 3 1157 4 7 915 6 4 1833 7 -20.0 -27.2 -46.2
Rice 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.0 0.0 0.0
Others 50 57 43 62 82 64.0
Forest Products 1/ 9 13 21 15 19 111.1
Logs .. 35 -- .. 38 -- 0 0 0 0 0 0 .. 38 -- 0.0 0.0 0.0
Lumber 92 62 6 103 62 6 78 102 8 119 74 9 76 170 13 -17.4 174.2 116.7
Plywood 3 901 2 4 758 3 3 971 3 3 831 3 2 1298 3 -33.3 44.1 50.0
Veneer Sheets/Corestocks 1 48 -- .. 10445 -- 1 189 -- 0 0 0 .. 8760 .. 0.0 18150.0 0.0
Others 1 3 2 -- 0 -100.0
Mineral Products 487 579 522 677 520 6.8
Copper Concentrates 53 1249 66 57 1055 60 38 1565 59 20 744 15 19 1753 34 -64.2 40.4 -48.5
Copper Metal 22 7648 165 1 8379 8 10 7529 72 32 8087 260 12 7981 95 -45.5 4.4 -42.4
Gold 2/ 19 1699 32 413 143 59 5 1530 8 6 1680 10 .. 1478 1 0.0 -13.0 -96.9
Iron Ore Agglomerates 720 23 16 811 31 25 930 28 26 715 26 19 950 27 26 31.9 17.4 62.5
Chromium Ore 41 50 2 30 93 3 31 73 2 19 66 1 19 166 3 -53.7 232.0 50.0
Nickel 0 0 0 0 0 0.0
Others 206 425 354 373 361 75.2
Petroleum Products 124 85 66 190 176 41.9
Manufactures 8819 11014 10781 9152 9267 5.1
Electronic Products 3/ 4696 4419 4399 4317 3902 -16.2
Other electronics 430 684 716 602 585 36.0
Garments 3/ 384 405 299 311 383 -0.4
Textile Yarns/Fabrics 45 45 41 40 43 -4.4
Footwear 3 3 4 5 4 33.3
Travel Goods and Handbags 22 10 6 23 29 31.8
Wood Manufactures 468 416 617 659 699 49.4
Furniture & Fixtures 38 55 42 45 50 31.6
Chemicals 435 630 471 407 751 72.6
Non-Metallic Mineral Manufactures 41 37 34 33 45 9.8
Machinery & Transport Equipment 1036 1559 1757 963 1008 -2.7
Processed Food and Beverages 329 337 303 478 527 60.2
Iron & Steel 47 78 70 58 52 10.6
Baby Carr., Toys, Games & Sporting Goods 43 57 67 71 62 44.2
Basketwork, Wickerwork, & Other
Articles of Plaiting Materials 13 12 6 11 14 7.7
Misc. Manufactured Articles, n.e.s. 122 585 702 125 127 4.1
Others 3/ 666 1682 1359 1007 986 40.0
Special Transactions 3/ 58 20 2 12 3 -94.9
TOTAL EXPORTS 3/ 10323 12671 12247 10958 11128 7.8
Coverage adjustments 3/ 16 22 15 33 24 50.0
TOTAL EXPORTS, BPM6 10339 12693 12262 10991 11152 7.9
.. Less than one thousand metric tons 1/ - Volume in 000 cubic meters; unit price in US$/cu.m.
-- Less than one million US$ 2/ - Volume in 000 troy ounces; unit price in US$/oz t.
p - Preliminary 3/ Excludes value of goods that do not involve change in ownership such as consigned, returned/replacement,
and temporarily exported goods
Note: Components may not add up to total due to rounding. 4/ Prices are derived from the NSO's Foreign Trade Statistics (value/volume), except for gold which is derived
using the IMF's commodity price data sheet.
Q2 Q3 Q4
Growth Rates
Q1 2013Q1
2012 p/
Q1
2013 p/
11b IMPORTS BY MAJOR COMMODITY GROUP
for periods indicated volume in 000 metric tons; unit price
1/ in U.S.$/mt; f.o.b. value in million U.S. dollars; growth rates in percent
Volume Price Value Volume Price Value Volume Price Value Volume Price Value Volume Price Value Volume Price Value
Capital Goods 2863 2959 2672 3254 2658 -7.2
Power Generating & Specialized Machines 876 952 967 997 899 2.6
Office & EDP Machines 524 525 483 423 377 -28.1
Telecommunication Eqpt. & Elect. Mach. 708 613 653 715 726 2.5
Land Transport Eqpt. excl. Passenger Cars & Motorized Cycle 311 309 329 352 323 3.9
Aircraft, Ships & Boats 300 424 71 611 209 -30.3
Prof. Sci. & Cont. Inst.; Photographic Eqpt. & Optical Goods 144 136 169 155 124 -13.9
Raw Materials & Intermediate Goods 6040 6559 6414 6308 5903 -2.3
Unprocessed Raw Materials 669 472 738 886 660 -1.3
Wheat 681 275 187 723 282 204 926 290 268 666 335 223 639 338 216 -6.2 22.9 15.5
Corn 94 378 35 15 1374 20 9 638 6 19 863 16 29 345 10 -69.1 -8.7 -71.4
Unmilled cereals excl. rice & corn 3 3 2 3 2 -33.3
Crude materials, inedible 400 198 432 626 401 0.3
Pulp & waste paper 14 13 9 7 10 -28.6
Cotton 2 2143 4 2 1869 4 2 1711 4 1 1519 2 4 1750 7 100.0 -18.3 75.0
Syn. fibers 9 2345 20 7 2584 19 8 3318 27 7 3034 23 6 2667 16 -33.3 13.7 -20.0
Metalliferous ores 224 7 101 457 238 6.3
Others 138 155 291 137 130 -5.8
Tobacco, unmanufactured 44 47 30 18 31 -29.5
Semi-Processed Raw Materials 5371 6087 5676 5422 5243 -2.4
Feeding stuffs for animals 507 396 201 524 441 231 433 533 230 553 555 306 485 585 284 -4.3 47.7 41.3
Animal & vegetable oils & fats 145 99 77 62 62 -57.2
Chemical 1598 1543 1644 1469 1423 -11.0
Chemical compounds 432 354 411 339 320 -25.9
Medicinal & pharmaceutical chemicals 224 235 242 259 256 14.3
Urea 124 378 47 108 397 43 167 386 64 195 358 70 127 291 37 2.4 -22.9 -21.3
Fertilizer excl. urea 183 343 63 232 345 80 323 353 114 238 340 81 215 326 70 17.5 -5.0 11.1
Artificial resins 428 407 385 325 351 -18.0
Others 404 424 428 394 389 -3.7
Manufactured goods 1272 1341 1245 1284 1355 6.5
Paper & paper products 217 851 185 241 807 195 227 818 186 207 836 173 243 761 185 12.0 -10.6 0.0
Textile yarn, fabrics & made-up articles 157 167 146 168 160 1.9
Non-metallic mineral mftures. 108 138 140 148 155 43.5
Iron & steel 401 893 358 398 879 350 400 800 320 433 785 340 484 754 365 20.7 -15.6 2.0
Non-ferrous metals 185 190 160 155 182 -1.6
Metal products 166 173 162 183 181 9.0
Others 113 128 131 116 127 12.4
Mat/Acc for the mftr. of elect. eqpt. 2156 2804 2480 2282 2119 -1.7
Iron ore, not agglomerated 0 0 0 496 139 69 0 0 0 120 160 19 0 0 0 0.0 0.0 0.0
Mineral Fuels & Lubricant 3870 3159 3428 3209 3176 -17.9
Coal, Coke 1564 93 146 2192 95 209 2007 87 174 2035 83 169 2108 79 166 34.8 -15.1 13.7
Petroleum Crude 2/
24.33 103.34 2514 11.33 116.25 1317 17.42 105.02 1829 16.69 111.37 1859 13.60 113.69 1546 -44.1 10.0 -38.5
Others 2/
9.05 133.69 1209 12.82 127.36 1633 12.09 117.74 1424 9.88 119.59 1181 12.08 121.18 1464 33.5 -9.4 21.1
Consumer Goods 1706 1910 1985 2093 1824 6.9
Durable 820 888 897 1077 914 11.5
Passenger cars & motorized cycle 466 501 483 601 519 11.4
Home appliances 69 81 96 114 99 43.5
Misc. manufactures 285 306 318 362 296 3.9
Non-Durable 886 1022 1088 1015 910 2.7
Food & live animals chiefly for food 812 955 1009 932 813 0.1
Dairy products 75 2671 201 82 2496 204 84 2291 192 80 2062 165 74 2473 183 -1.3 -7.4 -9.0
Fish & fish preparation 62 875 55 55 994 54 52 807 42 71 790 56 70 829 58 12.9 -5.3 5.5
Rice 3/
101 276 28 297 422 126 437 416 182 174 322 56 4 763 3 -96.0 176.4 -89.3
Fruits & vegetables 92 82 75 126 91 -1.1
Others 436 489 518 529 478 9.6
Beverages & tobacco mfture. 18 22 23 23 30 66.7
Articles of apparel, access. 56 45 56 60 67 19.6
Special Transactions 0 25 45 31 12 0.0
TOTAL IMPORTS 4/
14479 14612 14544 14895 13573 -6.3
Coverage Adjustments 647 776 739 797 312 -51.8
TOTAL IMPORTS, BPM6 15126 15388 15283 15692 13885 -8.2
1/ Derived from NSO's value and volume - - Less than one million US dollars
2/ Volume in million barrels; unit price in U.S.$/barrel
3/ Includes rice imporation arrivals which were contracted in the previous year . . Less than one thousand metric tons
4/ Excludes value of goods that do not involve change in ownership such as consigned, returned/replacement, and temporarily imported goods
p/ - Preliminary
Components may not add up to total due to rounding.
Source: National Statistics Office
2013 p/Q1 2013
2012 p/ Growth Rates (%)Commodities Q1 Q2 Q3 Q4 Q1
12 INTERNATIONAL RESERVES
as of periods indicated
in million US dollars
2 0 1 1 2 0 1 2 2013
Mar Jun Sep Dec Mar Jun Sep Dec Mar
Gross International Reserves 65,983 68,996 75,174 75,302 76,129 76,130 82,029 83,831 83,951
Gold 7,080 7,617 7,457 8,013 10,444 9,981 11,043 10,353 9,901
SDRs 1,154 1,165 1,137 1,118 1,298 1,272 1,293 1,288 1,257
Foreign Investments 57,002 59,478 65,710 65,276 63,536 64,035 68,304 70,728 71,325
Foreign Exchange 386 362 423 423 334 323 858 928 944
Reserve Position in the Fund 361 374 447 472 517 519 531 534 524
Net International Reserves 65,970 68,993 75,161 75,300 76,116 76,128 82,016 83,829 83,938
Source: Bangko Sentral ng Pilipinas
13 EXCHANGE RATES OF THE PESO
pesos per unit of foreign currency
period averages
2011 43.3131 0.5436 60.2791 69.4551 34.4567 5.5645 14.1716 1.4219 0.0049 1.4746 0.0391
Jan 44.1722 0.5350 59.0151 69.6606 34.3415 5.6790 14.4303 1.4482 0.0049 1.5183 0.0395
Feb 43.7031 0.5293 59.6914 70.4721 34.2489 5.6109 14.3526 1.4237 0.0049 1.4973 0.0391
Mar 43.5160 0.5335 60.9427 70.3743 34.3116 5.5850 14.3386 1.4333 0.0050 1.4748 0.0388
Apr 43.2402 0.5190 62.3995 70.6571 34.6324 5.5619 14.3268 1.4375 0.0050 1.4866 0.0398
May 43.1307 0.5317 61.8629 70.5236 34.8410 5.5488 14.3417 1.4284 0.0050 1.5014 0.0399
Jun 43.3657 0.5386 62.4391 70.4189 35.1330 5.5726 14.3534 1.4232 0.0051 1.5075 0.0402
Jul 42.8088 0.5389 61.1949 69.0626 35.1642 5.4967 14.2929 1.4211 0.0050 1.4851 0.0404
Aug 42.4209 0.5505 60.7724 69.4325 35.0881 5.4408 14.2280 1.4214 0.0050 1.4650 0.0395
Sep 43.0256 0.5599 59.3496 67.9974 34.4720 5.5202 14.0215 1.4171 0.0049 1.4516 0.0387
Oct 43.4514 0.5669 59.4688 68.3653 33.9693 5.5856 13.8267 1.4070 0.0049 1.4334 0.0376
Nov 43.2745 0.5587 58.6807 68.3853 33.5505 5.5605 13.7269 1.3992 0.0048 1.4318 0.0381
Dec 43.6486 0.5606 57.5321 68.1115 33.7275 5.6121 13.8198 1.4032 0.0048 1.4428 0.0381
2012 42.2288 0.5299 54.3079 66.9249 33.8041 5.4441 13.6818 1.3595 0.0045 1.4282 0.0375
Jan 43.6191 0.5670 56.2828 67.6569 34.0705 5.6185 13.9823 1.3818 0.0048 1.4524 0.0381
Feb 42.6608 0.5448 56.4222 67.4003 34.0289 5.5017 14.1129 1.3882 0.0047 1.4439 0.0380
Mar 42.8574 0.5199 56.6288 67.8338 34.0664 5.5216 14.0931 1.3975 0.0047 1.4523 0.0381
Apr 42.6998 0.5253 56.2914 68.4145 34.1571 5.5012 13.9585 1.3841 0.0047 1.4492 0.0376
May 42.8515 0.5375 54.8780 68.2662 33.9592 5.5199 13.8470 1.3704 0.0046 1.4544 0.0370
Jun 42.7765 0.5397 53.6192 66.5015 33.4579 5.5130 13.4563 1.3518 0.0046 1.4297 0.0367
Jul 41.9054 0.5302 51.5881 65.3765 33.2304 5.4033 13.2341 1.3250 0.0044 1.3981 0.0367
Aug 42.0452 0.5349 52.0961 66.0660 33.7009 5.4213 13.4950 1.3384 0.0044 1.4040 0.0372
Sep 41.7490 0.5341 53.6856 67.2180 33.8922 5.3843 13.5519 1.3467 0.0044 1.4135 0.0371
Oct 41.4521 0.5258 53.7545 66.6237 33.8484 5.3477 13.5689 1.3515 0.0043 1.4173 0.0374
Nov 41.1222 0.5082 52.7036 65.5939 33.6142 5.3060 13.4464 1.3399 0.0043 1.4123 0.0378
Dec 41.0067 0.4914 53.7443 66.1474 33.6230 5.2914 13.4347 1.3388 0.0043 1.4117 0.0381
2013 40.7048 0.4415 53.7888 63.1776 32.9032 5.2487 13.2149 1.3661 0.0042 1.3813 0.0376
Jan 40.7295 0.4580 54.1270 65.0893 33.1823 5.2537 13.4143 1.3549 0.0042 1.4011 0.0382
Feb 40.6723 0.4372 54.3618 63.0701 32.8469 5.2446 13.1338 1.3647 0.0042 1.3727 0.0374
Mar 40.7127 0.4293 52.8776 61.3734 32.6803 5.2477 13.0966 1.3788 0.0042 1.3700 0.0370
Source: Bangko Sentral ng Pilipinas
New Taiwan
Dollar
South Korean
Won
Indonesian
RupiahThailand BahtUS Dollar Japanese Yen Euro Pound Sterling
Singapore
Dollar
Hongkong
Dollar
Malaysian
Ringgit
13a EXCHANGE RATES OF THE PESO
units of foreign currency per peso
period averages
2011 0.0231 1.8411 0.0166 0.0144 0.0290 0.1797 0.0706 0.7033 202.2252 0.6784 25.5615
Jan 0.0226 1.8691 0.0169 0.0144 0.0291 0.1761 0.0693 0.6905 204.0816 0.6586 25.3256
Feb 0.0229 1.8891 0.0168 0.0142 0.0292 0.1782 0.0697 0.7024 204.2901 0.6679 25.5460
Mar 0.0230 1.8742 0.0164 0.0142 0.0291 0.1791 0.0697 0.6977 201.0490 0.6780 25.7588
Apr 0.0231 1.9269 0.0160 0.0142 0.0289 0.1798 0.0698 0.6956 200.2107 0.6727 25.1157
May 0.0232 1.8806 0.0162 0.0142 0.0287 0.1802 0.0697 0.7001 198.1982 0.6661 25.0798
Jun 0.0231 1.8567 0.0160 0.0142 0.0285 0.1794 0.0697 0.7026 196.8135 0.6634 24.8933
Jul 0.0234 1.8557 0.0163 0.0145 0.0284 0.1819 0.0700 0.7037 199.6198 0.6734 24.7292
Aug 0.0236 1.8165 0.0165 0.0144 0.0285 0.1838 0.0703 0.7035 200.0000 0.6826 25.2951
Sep 0.0232 1.7860 0.0168 0.0147 0.0290 0.1812 0.0713 0.7057 202.7650 0.6889 25.8732
Oct 0.0230 1.7641 0.0168 0.0146 0.0294 0.1790 0.0723 0.7107 204.0816 0.6976 26.6241
Nov 0.0231 1.7899 0.0170 0.0146 0.0298 0.1798 0.0728 0.7147 207.8775 0.6984 26.2177
Dec 0.0229 1.7839 0.0174 0.0147 0.0296 0.1782 0.0724 0.7126 207.7151 0.6931 26.2796
2012 0.0237 1.8893 0.0184 0.0149 0.0296 0.1837 0.0731 0.7358 221.5638 0.7003 26.6838
Jan 0.0229 1.7638 0.0178 0.0148 0.0294 0.1780 0.0715 0.7237 207.7151 0.6885 26.2369
Feb 0.0234 1.8355 0.0177 0.0148 0.0294 0.1818 0.0709 0.7204 210.8434 0.6926 26.3125
Mar 0.0233 1.9235 0.0177 0.0147 0.0294 0.1811 0.0710 0.7156 212.9719 0.6886 26.2749
Apr 0.0234 1.9036 0.0178 0.0146 0.0293 0.1818 0.0716 0.7225 214.2857 0.6900 26.6115
May 0.0233 1.8606 0.0182 0.0146 0.0294 0.1812 0.0722 0.7297 215.6863 0.6876 26.9939
Jun 0.0234 1.8528 0.0187 0.0150 0.0299 0.1814 0.0743 0.7398 219.7802 0.6995 27.2480
Jul 0.0239 1.8860 0.0194 0.0153 0.0301 0.1851 0.0756 0.7547 224.9489 0.7153 27.2817
Aug 0.0238 1.8694 0.0192 0.0151 0.0297 0.1845 0.0741 0.7471 227.2727 0.7123 26.9122
Sep 0.0240 1.8722 0.0186 0.0149 0.0295 0.1857 0.0738 0.7425 227.5313 0.7075 26.9397
Oct 0.0241 1.9019 0.0186 0.0150 0.0295 0.1870 0.0737 0.7399 232.3126 0.7056 26.7152
Nov 0.0243 1.9679 0.0190 0.0152 0.0297 0.1885 0.0744 0.7463 232.5581 0.7080 26.4329
Dec 0.0244 2.0350 0.0186 0.0151 0.0297 0.1890 0.0744 0.7469 232.8590 0.7084 26.2467
2013 0.0246 2.2665 0.0186 0.0158 0.0304 0.1905 0.0757 0.7320 237.8384 0.7240 26.6305
Jan 0.0246 2.1833 0.0185 0.0154 0.0301 0.1903 0.0745 0.7381 237.3247 0.7137 26.1531
Feb 0.0246 2.2870 0.0184 0.0159 0.0304 0.1907 0.0761 0.7327 238.0952 0.7285 26.7344
Mar 0.0246 2.3291 0.0189 0.0163 0.0306 0.1906 0.0764 0.7253 238.0952 0.7299 27.0040
Source: Bangko Sentral ng Pilipinas
Hongkong
DollarUS Dollar
Japanese
YenEuro
South
Korean
Won
Malaysian
Ringgit
Thailand
Baht
Indonesian
Rupiah
New Taiwan
Dollar
Pound
Sterling
Singapore
Dollar
13b EFFECTIVE EXCHANGE RATE INDICES OF THE PESO
December 1980 = 100
period averages
Broad 2
Narrow 3
Broad 2
Narrow 3
2011 13.17 40.97 85.56 86.03 143.00 176.21
Jan 13.18 40.86 85.82 85.13 140.89 173.51
Feb 13.22 41.10 86.15 85.82 141.73 174.48
Mar 13.14 40.83 84.95 85.07 141.35 172.94
Apr 13.15 40.56 84.67 85.26 140.23 171.32
May 13.14 40.34 84.07 85.23 141.37 174.99
Jun 13.04 40.18 83.86 84.98 142.07 175.87
Jul 13.20 40.42 84.51 87.28 143.28 177.09
Aug 13.23 40.80 85.06 87.33 144.65 178.23
Sep 13.20 41.15 85.70 86.24 144.10 177.78
Oct 13.10 41.59 86.45 85.83 144.61 178.63
Nov 13.22 41.90 87.61 87.09 146.56 180.10
Dec 13.24 41.93 87.84 87.05 145.23 179.64
2012 13.86 43.66 92.70 91.80 151.89 189.86
Jan 13.32 41.82 87.69 87.57 144.39 178.00
Feb 13.54 42.21 88.59 88.38 144.58 178.25
Mar 13.62 42.40 89.32 88.59 145.34 180.00
Apr 13.64 42.72 90.05 89.30 146.69 180.78
May 13.67 42.96 90.55 89.81 149.54 186.90
Jun 13.79 43.64 92.28 91.03 153.23 191.72
Jul 14.15 44.40 94.25 95.29 157.57 196.30
Aug 14.05 44.26 94.28 94.88 157.59 197.49
Sep 13.95 44.50 95.06 92.89 156.04 197.05
Oct 14.04 44.81 96.16 93.24 155.16 197.05
Nov 14.28 45.05 96.98 95.32 157.01 197.72
Dec 14.30 45.09 97.21 95.32 155.60 197.06
2013 14.69 45.60 98.12 97.88 156.06 195.90
Jan 14.53 45.29 97.69 97.12 156.07 196.64
Feb 14.68 45.73 98.38 97.74 155.87 195.94
Mar 14.87 45.79 98.30 98.79r
156.25r
195.12r
1 US, Japan, European Monetary Union, United Kingdom
2 Singapore, South Korea, Taiwan, Malaysia, Thailand, Indonesia, Hongkong
3 Indonesia, Malaysia, Thailand
r Revised using actual inflation rates
Source: Bangko Sentral ng Pilipinas
N O M I N A L R E A L
Competing Countries Competing CountriesMajor Trading
Partners 1
Major Trading
Partners 1
14 TOTAL EXTERNAL DEBT
as of periods indicated
in million US dollars
Medium & Medium &
Trade Non-Trade Long- Term Trade Non-Trade Long- Term
Grand Total 3,118 5,365 51,855 60,337 2,766 7,020 49,260 59,046
Public Sector - 652 44,523 a
45,175 - 675 42,262 a
42,937
Banks - 652 4,138 4,790 - 675 3,917 4,592
Bangko Sentral ng Pilipinas - - 1,451 1,451 - - 1,424 1,424
Others - 652 2,688 3,339 - 675 2,493 3,168
Non-Banks - - 40,385 40,385 - - 38,344 38,344
CB-BOL - - - - - - - -
NG and Others - - 40,385 40,385 - - 38,344 38,344
Private Sector 3,118 4,713 7,331 15,162 2,766 6,345 6,998 16,109
Banks - 4,525 1,222 5,747 - 6,157 1,234 7,390
Foreign Bank Branches - 788 43 831 b
- 1,423 62 1,485 b
Domestic Banks - 3,737 1,179 4,916 - 4,733 1,172 5,905
Non-Banks 3,118 c
188 6,109 d
9,415 2,766 c
188 5,765 d
8,719
Inclusiona
Cumulative foreign exchange revaluation on US dollar-denominated
multi-currency loans from Asian Development Bank and World Bank
Exclusionsb
Due to Head Office/Branches Abroad accounts of branches and
offshore banking units of foreign banks operating in the Philippinesc
Loans without BSP approval/registrationd
Obligations under various capital lease agreements;
Loans without BSP approval/registration
Source: Bangko Sentral ng Pilipinas
Total
31 March 2012
30 December 2012
Short-termTotal
11,241
61
6,995
253
1,210
31 March 2013
Short-term
30 December 2012
1,214
10,309
862
8,077
125
15 SELECTED FOREIGN DEBT SERVICE INDICATORS
for periods indicated
in million US dollars
2013 p/
Q1 Q2 Q3 Q4 Q1
Debt Service Burden (DSB) 1/
1950 1603 1627 1376 2383
Principal 978 973 690 811 1556
Interest 972 630 937 565 827
Export Shipments (XS) 3/
10339 12692 12262 10991 11152
Exports of Goods and Receipts 20507 22441 22870 22450 21764
from Services and Income (XGSI) 2/ 3/
Current Account Receipts (CAR) 3/
21488 23470 23914 23504 22783
Gross National Income (GNI) 67430 73657 72917 84970 77897
Ratios (%) :
DSB to XS 18.86 12.63 13.27 12.52 21.37
DSB to XGSI 9.51 7.14 7.11 6.13 10.95
DSB to CAR 9.07 6.83 6.80 5.85 10.46
DSB to GNI 2.89 2.18 2.23 1.62 3.06
1Debt service burden represents principal and interest payments after rescheduling. In accordance with the
internationally-accepted concept, debt service burden consists of (a) Principal and interest payments on fixed MLT credits
including IMF credits, loans covered by the Paris Club and Commercial Banks rescheduling, and New Money Facilities;
and (b) Interest payments on fixed and revolving short-term liabilities of banks and non-banks but excludes (i) Prepayments of
future years' maturities of foreign loans and (ii) Principal payments on fixed and revolving ST liabilities of banks and non-banks.2
Includes cash remittances of overseas Filipinos that were coursed through and reported by commercial banks which
are reflected under Compensation of Employees in the income account and workers' remittances in the Current
Transfers account.3
Based on the accounting principle under the Balance of Payments and International Investment Position Manual, Sixth edition (BPM6)p/
Preliminaryr/
Revised to reflect latest data adjustments
Source: BSP
2012
16 SELECTED FOREIGN INTEREST RATES
period averages; in percent
2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
US Prime Rate 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500
US Discount Rate 0.6096 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500
US Federal Funds Rate 0.1394 0.1980 0.1996 0.1943 0.1622 0.1015 0.1054 0.0738 0.1141 0.1648 0.1570 0.1722 0.1546
LIBOR (90 days) 0.2521 0.4357 0.3880 0.2929 0.3079 0.2632 0.2978 0.4794 0.5141 0.4663 0.4239 0.3170 0.2917
SIBOR (90 days) 0.2574 0.4399 0.4101 0.3056 0.3119 0.2725 0.3068 0.4854 0.5198 0.4667 0.4287 0.3189 0.2951
Source: Bloomberg, Asian Wall Street Journal, Reuters
2012 2010 2011
17 BALANCE SHEET OF THE BANGKO SENTRAL NG PILIPINAS
as of periods indicated
in billion pesos
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sepu
Decu\p
Assets 2,580.7 2,752.8 2,823.3 3,195.4 3,331.9 3,459.4 3,768.0 3,787.9 3,727.9 3,684.2 3,889.7 3,975.9
2,580.8 2,752.8 2,823.3 3,195.3 3,331.9 3,459.4 3,768.0 3,787.9 3,727.9 3,684.2 3,889.7 3,975.9
International Reserves 2,059.2 2,255.0 2,354.9 2,721.6 2,848.5 2,975.8 3,273.0 3,286.5 3,248.1 3,202.9 3,408.2 3,424.3
Foreign Exchange Receivable 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Domestic Securities 251.6 251.1 254.9 245.7 243.4 239.9 244.0 240.4 219.0 217.3 220.3 218.1
Loans and Advances 145.1 125.3 116.3 111.9 111.5 106.4 113.0 114.1 115.8 119.4 116.5 118.5
Revaluation of International Reserves 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 64.6
Bank Premises and Other Fixed Assets 12.3 12.5 12.5 12.9 12.8 12.6 13.3 15.4 15.6 16.1 16.3 16.5
Derivative Instruments in a Gain Position 0.1 10.1 0.1 1.3 0.2 0.6 4.0 2.6 0.5 0.3 0.2 1.5
Derivative Asset 0.0 0.0 0.0 0.7 0.7 0.0 0.0
Other Assets 112.4 98.9 84.5 101.9 115.5 124.0 120.8 128.9 128.3 127.4 128.2 132.4
Liabilities 2,351.8 2,529.1 2,619.3 3,024.0 3,199.5 3,338.2 3,632.3 3,647.9 3,606.3 3,582.7 3,815.1 3,911.4
Currency Issue 527.5 503.3 487.5 601.3 521.9 521.4 524.1 648.9 576.2 555.5 559.6 692.7
Deposits 1,524.0 1,577.7 1,716.1 1,973.6 2,321.9 2,360.6 2,630.7 2,466.2 2,630.2 2,657.2 2,851.6 2,854.5
Reserve Deposits of Other Depository Corporations (ODCs) 1
486.9 475.3 497.7 518.8 535.3 579.0 638.5 673.5 680.2 716.6 724.7 782.6
Reserve Deposits of Other Financial Corporations (OFCs) 2
0.4 0.4 0.4 0.4 0.6 0.7 0.6 0.6 0.6 0.3 0.3 0.3
Special Deposit Accounts 3
786.1 835.2 912.3 1,239.1 1,488.9 1,389.2 1,622.1 1,642.7 1,577.1 1,572.3 1,826.3 1,640.1
Treasurer of the Philippines 4
126.7 140.6 193.3 110.1 186.7 310.3 294.0 60.1 293.8 259.7 214.3 340.8
Other Foreign Currency Deposits 28.6 37.2 26.2 19.9 17.0 11.1 1.2 14.5 3.5 23.6 15.8 20.5
Foreign Financial Institutions 51.4 47.0 46.9 41.8 38.3 38.4 44.4 43.0 43.0 40.3 40.3 40.3
Other Deposits 5
44.0 42.1 39.4 43.4 55.2 31.9 29.9 31.9 32.0 44.4 30.0 29.8
Foreign Loans Payable 3.2 3.5 2.6 2.7 1.7 1.8 1.0 1.0 0.1 0.1 0.1 0.1
Net Bonds Payable 32.3 32.5 31.3 21.9 22.2 21.7 22.4 22.0 21.9 21.1 21.3 20.5
Derivative Instruments in a Loss Position 14.8 1.7 25.2 7.0 5.9 3.5 0.4 0.3 3.9 5.8 0.9 0.6
Derivatives Liability 0.1 0.1 0.2 0.0 0.1 0.1 0.1 0.2 0.3 0.3 0.2 0.1
Allocation of SDRs 57.6 57.6 57.3 56.6 57.7 58.2 57.4 56.5 55.7 53.8 53.9 52.9
Revaluation of International Reserves 23.9 137.1 45.0 61.9 26.9 66.7 144.6 145.8 50.7 4.8 38.9 0.0
Reverse Repurchase Agreements 3
159.6 206.8 245.1 285.2 231.4 295.2 241.7 296.0 256.6 274.1 277.8 278.5
Other Liabilities 8.8 8.9 8.9 13.8 9.7 8.9 10.1 11.0 10.7 10.0 10.9 11.5
Net Worth 228.9 223.7 204.1 171.4 132.4 121.2 135.7 140.0 121.6 101.5 74.6 64.5
Capital 10.0 10.0 10.0 10.0 10.0 10.0 10.0 20.0 20.0 20.0 20.0 40.0
Surplus/Reserves 218.9 213.7 194.1 161.4 122.4 111.2 125.7 120.0 101.6 81.5 54.6 24.5
Note: Details may not add up to totals due to rounding.u
Unaudited. Starting with end-December 2005, BSP financial statements have been prepared in compliance with some of the requirements of the Philippine Financial Reporting Standards (PFRS)
and Philippine Accounting Standards (PAS) both of which have been aligned with the International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS). p
Preliminary1
ODCs are deposit generating institutions other than the BSP such as universal and commercial banks (UB/KBs), specialized government banks (SGBs), thrift banks (TBs), rural banks (RBs)
and non-banks with quasi-banking functions (NBQBs).2
OFCs are trust units of banks.3
Includes accrued interest payables.4
Includes foreign currency deposits.5
Mostly GOCC deposits.
Source: Bangko Sentral ng Pilipinas
20122010 2011
18 INCOME POSITION OF THE BANGKO SENTRAL NG PILIPINAS
1
2 Q1 Q2 1
Q3 1
Q4 FY Q1 Q2 1
Q3 1
Q4 FY Q1 Q2 Q3u
Q4u/p
FYu/p
3 2 1 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct
Revenues 26.972 27.593 24.049 34.951 113.565 16.296 25.873 57.695 18.871 118.735 17.223 17.851 15.279 15.376 65.729
Interest Income 11.780 10.472 10.618 10.579 43.449 11.359 11.228 11.105 11.929 45.621 10.485 10.161 10.145 10.125 40.916
International Reserves 7.326 6.178 6.613 6.850 26.967 8.526 8.591 8.267 8.456 33.840 8.202 7.511 7.502 7.598 30.813
Domestic Securities 2.749 2.737 2.773 2.627 10.886 1.654 1.361 1.579 1.152 5.746 0.984 1.206 1.282 1.025 4.497
Loans and Advances 1.143 1.038 0.865 0.852 3.898 0.753 0.750 0.727 1.758 3.988 0.741 0.774 0.791 0.905 3.211
Others 0.562 0.519 0.367 0.250 1.698 0.426 0.526 0.532 0.563 2.047 0.558 0.670 0.570 0.597 2.395
Miscellaneous Income 15.215 17.036 13.305 24.327 69.883 4.973 14.587 46.384 6.813 72.757 6.647 7.539 4.957 5.097 24.240
Net Income from Branches -0.023 0.085 0.126 0.045 0.233 -0.036 0.058 0.206 0.129 0.357 0.091 0.151 0.177 0.154 0.573
Expenses 17.668 19.964 20.745 24.105 82.482 24.319 31.162 31.343 29.144 115.968 28.302 27.115 27.727 27.544 110.688
Interest Expenses 14.418 15.583 16.568 19.503 66.072 20.851 23.507 26.290 24.986 95.634 24.492 22.028 22.793 21.449 90.762
Legal Reserve Deposits of Banks 3.433 3.670 3.642 3.474 14.219 1.966 2.031 2.419 0.428 6.844 1.640 0.697 0.006 0.006 2.348
National Government Deposits 0.660 0.681 0.950 0.925 3.216 0.771 1.289 1.695 1.071 4.826 0.944 1.385 1.331 2.029 5.689
BSP Debt Instruments 2.068 1.786 1.639 2.636 8.129 2.733 2.688 2.733 3.047 11.201 2.443 2.392 2.666 2.519 10.020
Special Deposit Accounts 7.555 8.628 9.594 11.726 37.503 14.600 16.766 18.876 19.914 70.156 18.960 17.051 18.300 16.443 70.755
Loans Payable and Other
Foreign Currency Deposits 0.620 0.674 0.621 0.594 2.509 0.545 0.561 0.548 0.517 2.171 0.483 0.474 0.465 0.450 1.872
Other Liabilities 0.082 0.144 0.122 0.148 0.496 0.236 0.172 0.019 0.009 0.436 0.022 0.029 0.025 0.002 0.078
Cost of Minting/Printing of Currency 0.521 0.714 0.884 1.994 4.113 0.749 1.340 1.354 2.000 5.443 0.951 1.175 1.224 2.218 5.569
Taxes and Licenses 0.632 0.567 0.572 0.754 2.525 0.418 2.932 0.334 0.262 3.946 0.301 0.260 0.272 0.236 1.069
Others 2.097 3.100 2.721 1.854 9.772 2.301 3.383 3.365 1.896 10.945 2.558 3.652 3.438 3.640 13.288
Net Income Before Gain/Loss(-) on FXR Fluctuations,
Provisions for Income Tax and Capital Reserves 9.304 7.629 3.304 10.846 31.083 -8.023 -5.289 26.352 -10.273 2.767 -11.079 -9.264 -12.448 -12.168 -44.959
Gain/Loss(-) on Foreign Exchange Rate Fluctuations 1
-21.859 -12.502 -22.556 -33.201 -90.118 -12.593 -9.227 -14.840 0.436 -36.224 -8.686 -9.567 -17.311 -14.812 -50.376
Provision for Income Tax 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.231 0.231 0.000 0.000 0.000 0.045 0.045
Capital Reserves 0.000
Net Income Available for Distribution -12.555 -4.873 -19.252 -22.355 -59.035 -20.616 -14.516 11.512 -10.068 -33.688 -19.765 -18.831 -29.759 -27.025 -95.380
uUnaudited. Starting with end-December 2005, BSP financial statements have been prepared in compliance with some of the requirements of the Philippine Financial Reporting Standards (PFRS)
and Philippine Accounting Standards (PAS), both of which have been aligned with the International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS). p
Preliminary1
This represents realized gains or losses from fluctuations in FX rates arising from foreign currency-denominated transactions of the BSP, including: 1) rollover/re-investments of matured FX investments
with foreign financial institutions and FX-denominated government securities; 2) servicing of matured FX obligations of the BSP; and 3) maturity of derivatives instruments.
Source: Bangko Sentral ng Pilipinas
for periods indicated
in billion pesos
20122010 2011