by: Sarah Joson
Thursday, April 28, 2016 |
Global financial services company HSBC recently said in its latest Global Research report “Philippine Elections 2016: Beyond the campaign noise” that the upcoming elections will carry minimal risks to the Philippine economy. It is also expected to bear insignificant changes to the country’s foreign exchange.
The report also stated that private consumption will remain strong over the short term period as remittances from overseas Filipino workers continue to grow 10 percent year-on-year, as noted in the available data for this year’s first quarter.
By analyzing the country’s “high-frequency indicators” such as credit growth and trade data, the bank found that there was an increase in momentum in the first quarter resulting from policies like improved fiscal efficiency and focus on infrastructure. This is believed to have benefitted the country and the voting public.
Moreover, HSBC noted that majority of the candidates are willing to further the pro-growth agenda by refining the country’s competitiveness through constitutional changes.
As for the foreign exchange market, HSBC pointed out that similar to the previous elections, the peso is expected to appreciate during the voting season. However, it was noted that the peso dropped recently as election period nears, but the potential challenges have been buoyed by other factors. For instance, the broad weak-US dollar environment circumvented some of the risks that could harm the Philippine peso.
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