first quarter 2016 report on economic and financial developments

First Quarter 2016

B A N G K O S E N T R A L N G P I L I P I N A SB A N G K O S E N T R A L N G P I L I P I N A SB A N G K O S E N T R A L N G P I L I P I N A SB A N G K O S E N T R A L N G P I L I P I N A S

Report on Economic and Financial Developments

ii

Report on

Economic and Financial Developments

Executive Summary 1

Introduction 4

Real Sector

Aggregate Supply and Demand 5

Labor and Employment 7

Fiscal Sector

National Government Cash Operations 8

Monetary Sector

Prices 9

Domestic Liquidity 10

Domestic Interest Rates 11

Monetary Policy Developments 12

Financial Sector

Banking System 12

Banking Policies 17

Capital Market Reforms 17

Stock Market 17

Bond Market 19

Credit Risk Assessment 21

Payments and Settlements System 22

External Sector

Balance of Payments 22

International Reserves 25

Exchange Rate 25

External Debt 27

Foreign Interest Rates 28

Global Economic Developments 29

Financial Condition of the BSP

Balance Sheet 31

Income Statement 31

Conclusion, Challenges and Future Policy Directions 32

Annexes

Statistical Tables

First Quarter 2016 Report on Economic and Financial Developments | 1

Executive Summary

Philippine economic growth accelerates.

The Philippine economy exceeded growth

expectations as real GDP grew by 6.9 percent during

the first quarter of 2016. This was the highest

year-on-year growth for a quarter recorded since Q3

2013 and also placed the Philippines as the fastest

growing economy in the region, ahead of China

(6.7 percent), Indonesia (4.9 percent) and Malaysia

(4.2 percent).

Employment conditions improve. The preliminary

results of the January 2016 Labor Force Survey

showed a general improvement in the country’s

labor and employment indicators. The

unemployment rate declined to 5.8 percent in Q1

2016 from 6.6 percent in the previous year while the

number of employed persons increased by

8.7 percent to 39.2 million, supported by the strong

employment growth in the construction sub-sector

and services sector. In contrast, underemployment

rate climbed to 19.7 percent from 17.9 percent a

year ago.

National Government (NG) cash operations yield a

higher deficit. The cash operations of the NG yielded

a deficit of P112.5 billion in Q1 2016, more than

triple the year-ago level of P33.5 billion. As a

percent of GDP, the NG’s cash position accounted

for -3.4 percent in Q1 2016, larger than the year-ago

level of -1.1 percent. Total revenues increased to

P479.0 billion from P470.5 billion in the previous

year owing to improved collections by the Bureau of

Internal Revenue (BIR) and the Bureau of Customs

(BOC). Meanwhile, total expenditures during the

review period increased by 17.4 percent from the

previous year to reach P591.5 billion due to

increased allotment to local government units

(LGUs) as well as rise in maintenance and other

operating expenditures.

Inflation inches upward. Headline inflation inched

higher to 1.1 percent in Q1 2016 from the

quarter-ago rate of 1.0 percent but remained below

the Government’s inflation target range of

3.0 percent ± 1.0 percentage point (ppt) for 2016.

Inflation pressures were attributed mainly to higher

prices of selected food items namely, meat,

vegetables, sugar as well as oils and fats.

Domestic liquidity expands. Money supply or M3

grew by 11.7 percent as of end-March 2016 to reach

P8.5 trillion, faster than the 9.4-percent expansion

as of end-December 2015. The increase in M3 was

driven largely by the 15.4-percent growth in

domestic claims or credits to the economy. Likewise,

credits extended to the private sector grew by

12.8 percent, consistent with the sustained growth

in bank lending.

The BSP maintains key policy rates in Q1. During its

monetary policy meetings on 11 February and

23 March, the BSP decided to maintain its key policy

interest rates at 4.0 percent for the overnight

borrowing or RRP facility and 6.0 percent for the

overnight lending or RP facility. The interest rates on

term RRPs, RPs, and SDAs were also kept steady.

Similarly, the reserve requirement ratios were left

unchanged. These policy decisions were based on

the BSP’s assessment of a manageable inflation

outlook and robust growth conditions. The BSP

noted that the risks to the inflation outlook have

shifted to the downside arising from slower-than-

expected global economic activity and potential

second-round effects from lower international oil

prices.

Domestic interest rates show mixed trends.

Average Treasury bill rates in the primary market

declined in Q1 2016, reflecting market preference

for short-term papers amid economic slowdown in

2 | First Quarter 2016 Report on Economic and Financial Developments

China and expected delay in further US policy rate

increases. Similarly, secondary market yields of

government securities decreased as of end-March

2016 relative to yields as of end-2015 as global

growth prospects remain subdued. Savings and time

deposit rates were higher during the review quarter

while interbank call loan rates and bank lending

rates were lower.

The Philippine banking system remains sound and

resilient. The Philippine banking system continued to

support long-term economic growth. Banks’ balance

sheets were marked by sustained growth in assets

and deposits. Asset quality indicators showed mixed

trends, while capital adequacy ratios remained

above international standards, even with the

implementation of the tighter Basel III framework.

Resources of the banking system grew by

10.1 percent to P12.5 trillion as of end-March 2016

from the year-ago level of P11.4 trillion. As a

percent of GDP, total resources stood at

92.5 percent. Universal and commercial banks

(U/KBs) continued to account for 90 percent of the

total resources of the banking system.

The Philippine banking system’s gross

non-performing loan (GNPL) ratio stood at

2.2 percent as of end-March 2016, an improvement

relative to the 2.5 percent posted a year-ago, but

slightly higher than the quarter-ago level of

2.1 percent. Meanwhile, the net non-performing

loan ratio increased slightly to 0.8 percent relative to

the 0.7 percent posted a year- and 0.6 percent a

quarter-ago. Prudent lending regulations along with

banks’ initiatives to improve their asset quality kept

the GNPL ratio below its pre-Asian crisis level of

3.5 percent.

Under the Basel III framework, the capital adequacy

ratios (CAR) of U/KBs stood at 15.5 percent and

16.4 percent on solo and consolidated bases at the

end of the third quarter in 2015. The banks’ latest

CAR on solo basis rose quarter-on-quarter from the

15.5 percent posted at end-June last year. On the

other hand, U/KBs’ CAR on consolidated basis at

end-September last year slightly declined from the

16.4 posted a quarter earlier.

Domestic equity prices continue to trend

downward. The Philippine Stock Exchange index

(PSEi) declined by 3.4 percent to average

6,766.4 index points in Q1 2016 from the average of

7,002.8 index points posted in the preceding

quarter. Persistent anxiety over weak global growth,

exacerbated by China’s bumpy economic transition

to a more sustainable growth path, the threat of

plunging oil prices and deepening monetary policy

divergence in advance economies dampened

sentiments. From the peak of 8,127.5 index points

posted in April 2015, the PSEi hit bear territory with

the benchmark index posting its lowest in

23 months at 6,084.3 index points on 21 January

2016.

Debt spreads widen. The cost of insuring Philippine

sovereign debt averaged 119 basis points (bps) in Q1

2016, up from the Q4 2015 average of 107 bps.

Against those of neighboring economies, the

Philippine CDS traded lower than Indonesia’s average

of 231 bps, Malaysia’s 182 bps and Thailand’s

151 bps. Meanwhile, the risk premium from holding a

Philippine sovereign bond over a similarly tenored US

Treasury bond slightly climbed as indicated by the

wider EMBIG Philippine spreads which averaged

124 bps, slightly higher than the previous quarter’s

123 bps. The wider debt spreads for the quarter

imply a rise in the cost of the country’s external

financing.

The BOP position reverses to a deficit. The BOP

position registered a deficit of US$210 million in Q1

2016, a reversal of the US$877 million surplus posted

in the same quarter the prior year. This developed as

a result of higher net outflows in the financial

account, even as the current account recorded a

surplus. The current account registered a lower

surplus at US$447 million as the trade-in-goods deficit

widened significantly with declining exports and

increasing imports. Meanwhile, the financial account

recorded higher net outflows of US$959 million

stemming largely from the other investment account,


particularly residents’ net repayment of loans and

placement of deposits abroad.

GIR level remains adequate. The country’s GIR as of

end-March 2016 rose to US$83.0 billion,

2.9 percent higher than its end-2015 level. The GIR

remains ample to cover 10.4 months’ worth of

imports of goods and services. It is also equivalent to

5.4 times the country’s short-term external debt

based on original maturity and 4.0 times based on

residual maturity. The increase in reserves was due

mainly to the NG’s net foreign currency deposits as

well as the BSP’s income from investments abroad

and revaluation adjustments on the BSP’s foreign

currency-denominated reserves. These inflows were

offset partially by payments made by the NG on its

maturing foreign exchange obligations.

External debt remains manageable. The

outstanding external debt of the country stood at

US$77.6 billion as of end-March 2016, higher by

0.2 percent on a q-o-q basis and also higher by

3.1 percent on a y-o-y basis. The increase during the

quarter was attributed to the following: (a) foreign

exchange (FX) revaluation adjustments

(US$814 million) as the US Dollar weakened,

particularly against the Japanese Yen; (b) previous

periods’ adjustments due to late reporting

(US$609 million); and (c) increased investments in

Philippine debt papers by non-resident investors

(US$224 million). In terms of maturity profile,

81.6 percent of the country’s external debt as of

end-March 2016 was primarily medium- to long-

term dated. This implies that FX requirements for

debt payments are well spread out and, thus, more

manageable. In addition, total outstanding debt

expressed as a percentage of gross national income

(GNI) remained at the end-2015 level of

21.9 percent.

The peso depreciates against the US dollar.

The peso depreciated against the US dollar in

Q1 2016 by 0.9 percent to average P47.30/US$1.

On a y-o-y basis, the peso depreciated by

6.1 percent relative to the P44.42/US$1 average in

Q1 2015. The weakening of the peso can be

attributed to the risk aversion towards emerging

market assets arising from concerns on the Chinese

economy and declining oil prices.

Global economic conditions remain uneven. Global

economic activity remained soft for both advanced

and developing economies. Meanwhile, global labor

market conditions generally showed signs of

improvement as inflation rates in advanced and

emerging economies were generally mixed.

The US economy grew by 2.0 y-o-y in Q1 2016 due to

positive contributions from consumer spending, and

residential fixed investment. Similarly, economic

activity in the Euro area grew by 1.5 percent in Q1

2016, albeit slightly lower than previous quarter’s

growth, as majority of Euro area economies

expanded except for Greece. In contrast, GDP

growth in Japan remained stagnant at zero percent

as private consumption and capital expenditure

remained soft.

Output growth among emerging economies in Asia

also remained weak. South Korea’s real GDP growth

decelerated to 2.7 percent in Q1 2016 as sluggish

exports continued to weigh on growth. The

Singaporean economy grew by only 1.8 percent due

to the weak performance of its manufacturing

sector. Meanwhile, the Chinese economy’s growth

moderated to 6.7 percent in Q1 2016 due to the

slowdown in the services sector while India

continued to expand at 7.3 percent.

Among , the ASEAN member states, Thailand’s GDP

expanded by 3.2 percent during the review quarter,

supported by the increase in net exports and

accelerated government spending. Indonesia slowed

down to 4.9 percent as household consumption

remained subdued. In Vietnam, GDP declined to

5.5 percent, driven mainly by the decline in

manufacturing and the prolonged drought that led

to the contraction in the agricultural sector. Malaysia

grew by 4.2 percent due to slower growth in the

manufacturing and services sectors.


Introduction The Philippine economy accelerated in Q1 2016 as

the real gross domestic product (GDP) posted a

stronger-than-expected growth of 6.9 percent. This

provides a confidence boost for the Government in

the ability of the economy to reach the GDP growth

target of 6.8-7.8 percent for 2016. In Q4 2015, the

country’s GDP posted 6.3 percent during the

quarter, bringing the 2015 GDP to 5.8 percent.

The sustained economic growth during the quarter

under review was accompanied by a slight uptick in

headline inflation to 1.1 percent, but remained

below the low end of the Government’s 2016

inflation target range of 3.0 percent ± 1.0 percentage

point (ppt). In Q4 2015, the headline inflation was

1.0 percent, bringing the 2015 inflation rate to

1.4 percent.

Meanwhile, domestic liquidity grew by

11.7 percent y-o-y as of end-March 2016 to reach

P8.5 trillion. During the prior quarter, domestic

liquidity increased by 8.3 percent, supported by the

sustained expansion in credits extended to the

domestic economy.

Taking into account the benign inflation

environment, the BSP decided to maintain its policy

interest rate during the review quarter. Interest

rates on term RRPs, RPs, and SDAs were also kept

steady. Similarly, the reserve requirement ratios

were left unchanged. The decision to keep policy

settings unchanged was based on the BSP’s

assessment of a manageable inflation outlook and

robust growth conditions.

The National Government (NG) reported a fiscal

deficit of P112.5 billion in Q1 2016, more than triple

the year-ago level of P33.5 billion. A quarter ago, NG

posted a fiscal deficit of P96.1 billion. As a percent of

GDP, the NG’s cash

position accounted for -3.4 percent in Q1 2016,

larger than the year-ago level of -1.1 percent.

The Philippine banking system remained stable

during the quarter review. Banks’ balance sheets

were marked by sustained growth in assets and

deposits as well as improved asset quality

indicators. Capital adequacy ratios remained above

international standards, even with the

implementation of tighter regulations under the

Basel III framework.

On the external front, there has been some capital

flow volatility resulting mainly from the continued

risk aversion towards emerging market assets over

concerns on weak global growth, declining oil prices,

and worries on the Chinese economy. This

tempered the performance of domestic financial

markets and led to a widening in risk premiums.

These developments, in turn, led to depreciation

pressures on the peso.

The country’s balance of payments (BOP) position

yielded a deficit of US$210 million in Q1 2016, a

reversal of the US$877 million surplus posted in the

same quarter a year ago. The negative BOP balance

during the quarter was a result of the higher net

outflows in the financial account, even as the current

account recorded a surplus.

The country’s gross international reserves (GIR) as of

end-March 2016 rose to US$83.0 billion,

2.9 percent higher than its level as of end-December

2015 (US$80.7 billion). At this level, the GIR is

adequate to cover 10.4 months’ worth of imports

and 5.4 times the country’s short-term external

debt. The increase in reserves was due mainly to the

NG’s net foreign currency deposits as well as the

BSP’s income from investments abroad and

revaluation adjustments on the BSP’s foreign

currency-denominated reserves.


Real Sector

Aggregate Supply and Demand

The domestic economy accelerated in Q1 2016 as

the real gross domestic product (GDP) posted a

stronger-than-expected growth of 6.9 percent. This

was the highest year-on-year growth for a quarter

recorded since Q3 2013, boosting the confidence of

the government in the ability of the economy to

reach the official GDP growth target of 6.8-7.8

percent for the full year of 2016. At this rate, the

Philippine economy has outperformed other Asian

economies, including China (6.7 percent), Indonesia

(4.9 percent) and Malaysia (4.2 percent).

Domestic economy

accelerates

Lending solid support to the Q1 2016 growth on the

supply side is the services sector, which remained a

key growth driver during the quarter. The continued

strong performance of the services sector was on

the account of the expansion in all its sub-sectors,

specifically the trade and maintenance of motor

vehicles, motorcycles, personal and household

goods, real estate, renting and business activities,

and financial intermediation accounts. On the

demand side, growth was notably investment-

driven. In fact, the contribution of investments to

the overall Q1 2016 GDP growth outpaced that of

private consumption, which historically has been the

main growth driver of the Philippine economy.

Meanwhile, real Gross National Income (GNI) during

the quarter was likewise the highest since Q3 2013

as it grew by 7.6 percent, buttressed by the

10.7 percent growth in Net Primary Income (NPI).

Chart 1. Gross Domestic Product and Gross National

Income

annual growth rate in percent; at constant 2000 prices

GDP by industry

The Q1 2016 output remains services sector-led,

with the sector maintaining its role as the primary

growth engine of the Philippine economy from the

production side. The sector, which expanded by

7.9 percent, contributed 4.4 ppts to the Q1 2016

GDP growth. The sustained resilience of the services

sector was reinforced by the equally robust

expansion of the following sub-sectors: financial

intermediation (9.1 percent), real estate, renting and

business activities (9.0 percent), and trade and

maintenance of motor vehicles, motorcycles,

personal and household goods (8.0 percent).

Meanwhile, the industry sector also continued to

perform quite strongly as it grew by 8.7 percent in

Q1 2016, enabling it to contribute 2.9 ppts to the

overall output growth during the quarter. This has

been the highest growth posted by the sector since

Q1 2015. The robust growth of the sector was

underpinned mainly by the notable performance of

the manufacturing (which contributed 1.9 ppts to

the industry sector’s output) and construction

(0.6 ppts), as well as utilities (0.3 ppts) subsectors.

Among the top performing manufacturing products

include: radio, television and communication

equipment and apparatus (which contributed

3.0 ppts to the 8.1 percent growth of the

manufacturing sub-sector in Q1 2016), chemical and

chemical products (2.8 ppts), and food manufactures

(2.1 ppts).

2

3

4

5

6

7

8

9

10

2013 2014 2015 2016

Real GDP Real GNI


On the contrary, the agriculture, hunting, forestry,

and fishing (AHFF) sector remains confronted with

weather-related challenges, resulting in a negative

performance in Q1 2016. The 4.4 percent

contraction registered by the sector in the quarter

was the highest rate of contraction in the past four

consecutive quarters. The intensification of the El

Niño weather phenomenon in the first three months

of 2016 took its toll on agricultural output. The

shrinkage of the agriculture sector shaved off

0.4 ppts from the overall Q1 2016 GDP growth. A

number of major crops posted double-digit declines

during the quarter including palay (10.0 percent),

corn (19.0 percent), and mango (21.4 percent). Amid

the dry spell, the fishing sub-sector also contracted

by 4.9 percent in Q1 2016. Nonetheless, with

appropriate stock management in place, the

reduction in agricultural output did not result in

drastic food price hikes.

Chart 2. Gross Domestic Product, by Industry


GDP by expenditure

On the expenditure side, a structural transformation

has been gradually emerging as investments became

the primary growth engine during the quarter. The

strong 23.8 percent growth of capital formation in

Q1 2016 represented the highest of the series of

double-digit expansions of the sector for the past

five consecutive quarters. This development

underscores the commitment of the government to

promote investments to complement resilient

consumer spending. Capital formation accounted

for 5.6 ppts of the Q1 2016 output. Bulk of the

robust growth in investments was accounted for by

the 25.6 percent expansion in fixed capital formation

during the quarter. This was, in turn, buttressed by

the 36.6 percent expansion of durable equipment

and 12.0 percent increase in construction activities.

The construction subsector largely benefited from

the reversal of public construction to a 39.9 percent

expansion in Q1 2016 from a 23.0 percent

contraction in Q1 2015. This developed as capital

outlays of major government agencies increased in

line with the government’s commitment to ramp up

public spending.

Meanwhile, household consumption remains a

stable growth driver for the economy as it

accelerated by 7.0 percent, the highest since Q2

2012. The lingering low inflation environment, as

well as the sustained strong inflow of remittances

from overseas Filipinos (OFs) continued to provide

support to household spending.

However, given the weak and uneven growth of the

global economy, net exports slashed 5.4 ppts from

the Q1 2016 real GDP growth. With mounting

uncertainties in the external environment led by the

slowdown and rebalancing in China, further decline

in global commodity prices particularly oil, and

declining capital flows to emerging market and

developing economies, trade sector performance in

the country remained subdued. Nonetheless,

prospects for greater regional integration could

partially provide a lift to the export sector by

providing more opportunities for client and product

diversification.

The performance of the domestic economy in Q1

2016 highlights the critical role of strong

macroeconomic fundamentals in dealing with both

global and domestic challenges. Meanwhile, the

structural transformation that has been emerging, as

exhibited by the notable contribution of investments

in the Q1 2016 real GDP growth, is an indication of

the continued favorable sentiment of both investors

and consumers on the prospects of the Philippine

economy. Election-related spending, which provided

a boost to the Q1 2016 output growth, is also

expected to contribute even more to the growth

-4

-2

0

2

4

6

8

10

12

14

2013 2014 2015 2016

Agriculture, Hunting, Forestry and Fishing Industry Services


outlook in the succeeding quarter. The peaceful

conduct of the national and local elections should

provide a positive feedback to investors and a sense

of continuity of macroeconomic performance,

supported by the domestic sources of resilience

including ample policy space.

Chart 3. Gross Domestic Product, by Expenditure


Labor and Employment

The preliminary results of the January 2016 Labor

Force Survey (LFS)11 of the Philippine Statistics

Authority (PSA) showed an improvement in the

country’s labor and employment indicators. In

January 2016, the number of employed persons

increased by 2.0 percent to 39.2 million from

38.5 million in the previous year, attributed to the

robust growth in both the industry and services

sectors.

Labor market buoys growth in

industry and services sector

Employed persons in the industry sector grew by

8.7 percent as the employment in construction sub-

sector expanded by 18.2 percent, approximately

459,000 workers. Likewise, employment in the

services sector increased by 5.6 percent, with

208,000 workers employed in public administration

and defense/compulsory security sub-sector.

Meanwhile, employment in the agriculture sector

11 Preliminary estimates of the January 2016 LFS continues to exclude the

Province of Leyte because the large number of households were displaced

by typhoon Yolanda.

declined by 8.2 percent as the El Niño phenomenon

affected several parts of the country. Of the

39.2 million employed persons, 56.3 percent are

employed in the services sector, 26.9 percent in the

agriculture sector, and 16.8 percent in the industry

sector.

Employment increased across most classes of

workers. During the reference period, the number

of wage and salary workers rose by 12.1 percent or

2.7 million workers, of which 76.2 percent worked

for private establishments. Similarly, the number of

those who work for private households went up by

16.6 percent or around 318,000 workers. In terms of

employment status, those who worked on a full-time

basis increased by 11.6 percent or 2.7 million

workers; while those who worked on a part-time

basis decreased by 12.7 percent or 1.8 million

workers.

The number of jobless persons declined to

2.4 million in January 2016 from 2.7 million a year

ago, bringing the unemployment rate down to

5.8 percent in January 2016 from 6.6 percent during

the same period a year ago. Conversely, the

underemployment12 rate rose to 19.7 percent from

17.9 percent.

Chart 4. Unemployment and Underemployment Rates

in percent

12 Underemployment covers all employed persons who desire to have

additional hours of work or additional job, or have a new job with longer

working hours. During the reference period, the underemployed persons

are those who work for less than 40 hours.

17.017.518.018.519.019.520.020.521.021.522.022.523.023.524.0

5.5

6.0

6.5

7.0

7.5

8.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Unemployment Rate (LHS) Underemployment Rate (RHS)

2012 2013 2014 2015 2016

-35

-25

-15

-5

5

15

25

35

45

55

2013 2014 2015 2016

Household Final Consumption Expenditure

Government Final Consumption Expenditure

Capital Formation


Meanwhile, the labor force participation rate13

in January 2016 contracted to 63.4 percent from

63.7 percent in January 2015. This could be due to

the faster growth in population size (those who are

15 years old and above) compared to the growth in

the number of persons in the labor force.

Fiscal Sector

National Government Cash

Operations

The cash operations of the NG yielded a deficit of

P112.5 billion in Q1 2016, more than triple the

year-ago level of P33.5 billion. As a percent of GDP,

the NG’s cash position accounted for -3.4 percent in

Q1 2016, larger than the year-ago level of -1.1

percent.

NG cash operations yield a

higher deficit

Total revenues for Q1 2016 reached P479.0billion,

higher than the year-ago level of P470.5 billion. Total

revenues as a share of GDP is recorded at

14.7 percent in Q1 2016, slightly lower than the

previous year’s 15.5 percent. The y-o-y increase in

revenues was due mainly to improved collections by

the Bureau of Internal Revenue (BIR) and the Bureau

of Customs (BOC). Tax collections, which constituted

88.7 percent of total revenues, amounted to

P424.7 billion, 5.2 percent higher than the year-ago

level. Non-tax revenues, which consisted mainly of

collections made by the Bureau of the Treasury (BTr),

decreased by 19.0 percent y-o-y.

13 Labor Force Participation Rate is computed by dividing the total number

of persons in the labor force by the total population 15 years old and

above.

Meanwhile, total expenditures in Q1 2016 reached

P591.5 billion, 17.4 percent higher than the

P504.0 billion expenditures in Q1 2015. Total

disbursements as a percent of GDP is recorded at

18.1 percent in Q1 2016. The y-o-y increase in

expenditures can be attributed mainly to increased

allotment to local government units (LGUs) as well

as for maintenance and other operating

expenditures (MOOE)14 during the quarter.

Netting out the interest payments from the

expenditures, the resulting primary balance

amounted to P60.3 billion, representing

3.3 percent of GDP in the review quarter.

The NG made net availments in Q1 2016 amounting

to P86.3 billion, a reversal from the net repayment

of P9.3 billion made in Q1 2015. The net availments

came mainly from domestic borrowings.

Chart 5. Cash Operations of the National Government

in billion pesos

The NG will continue to pursue fiscal consolidation in

the medium term by supporting legislative initiatives

to raise revenues and widen the tax base. The NG

has more resources that can be allocated to

accelerate infrastructure spending. The need to

address infrastructure gaps is a top priority. There

are plans to increase spending on infrastructure to

5 percent of GDP in 2016.

14 Infrastructure and other capital outlays also significantly improved during

the review period.

-200

-100

0

100

200

300

400

500

600

700

2013 2014 2015 2016

Revenues

Expenditures

Surplus/Deficit (-)


Monetary Sector

Prices

Headline inflation was higher in Q1 2016 due largely

to higher prices of selected food items. Inflation

went up to 1.1 percent from 1.0 percent in the

previous quarter but remained below the low end of

the government’s announced target of 3.0 percent ±

1.0 percentage point for 2016.

Supply-dynamics continue to

drive domestic inflation

On the other hand, indicators of underlying price

pressures like core inflation15 eased to 1.6 percent

from 1.8 percent in the previous quarter. Similarly,

two out of the three alternative measures of core

inflation computed by the BSP were lower in Q1 2016

while the weighted median measure was steady

relative to the previous quarter.

Table 1. Alternative Core Inflation Measures

quarterly averages of year-on-year change

Food inflation accelerated to 1.6 percent in

Q1 2016 from 1.3 percent in the previous quarter.

15 Excludes certain volatile food and energy items.

The slightly higher food inflation can be traced mainly

to price increases in certain key food items namely,

meat, vegetables, sugar as well as oils and fats.

Meanwhile, rice prices continued to decline

compared to year-ago levels as the arrival of

additional rice importation and onset of the main

harvest season in the previous quarter ensured

sufficient supply during the start of the year.

Rice accounts for 8.9 percent of total CPI basket.

On the other hand, non-food inflation remained

steady in Q1 2016 at 0.5 percent. Inflation for

housing, water, electricity, gas, and other fuels

remained in the negative territory as utility rates

declined. Electricity rates decreased during the

quarter on lower generation charges while water

rates also declined during the quarter.

Chart 6. Food and Non-Food Inflation in the Philippines

(2006=100)

in percent

Furthermore, despite increases in international crude

prices earlier this year, prices of domestic petroleum

products remained lower compared to year-ago

levels. This led to lower inflation for transport

services due largely to fare rollbacks (i.e., public

utility jeepney) during the quarter.

Nonetheless, the continued decline in inflation for

utilities- and oil-related items were counterbalanced

by higher price increases in health, recreation and

culture as well as restaurants and miscellaneous

goods and services. Transport fares for air and sea

travel also increased due to seasonal demand for

provincial trips during the Easter holiday in March.

Quarter

Official

Headline

Inflation

Official Core

Inflation

Trimmed

Mean 1

Weighted

Median 2

Net of

Volatile

Items 3

2014 4.1 3.0 3.5 2.9 2.6

Q1 4.1 3.0 3.3 2.6 2.8

Q2 4.4 3.0 3.6 3.2 2.6

Q3 4.7 3.3 3.8 3.1 2.8

Q4 3.6 2.7 3.3 2.7 2.4

2015 1.4 2.0 1.9 1.9 1.8

Q1 2.5 2.5 3.0 3.0 2.3

Q2 1.7 2.2 2.1 2.2 1.9

Q3 0.6 1.6 1.3 1.2 1.5

Q4 1.0 1.8 1.3 1.3 1.5

2016 0.8 1.1 1.2 1.3 1.3

Q1 1.1 1.6 1.2 1.3 1.31

The trimmed mean represents the average infla ti on rate of the (weighted) middle 70 percent

in a lowest-to-hi ghest ranki ng of year-on-year i nfl ati on rates for a l l CPI components .2

The weighted median represents the middl e i nfl ati on rate (corres ponding to a cumul ati ve CPI

we ight of 50 percent) i n a l owest-to-highest ra nking of year-on-year i nfl ati on rates .3

The net of volati l e i tems method excludes the fol lowing i tems: bread and cereals , meat, fish,

fruit, vegetabl es , gas , sol id fuel s , fuels and l ubri cants for personal trans port equipment, and

passenger transport by road, which repres ents 39.0 percent of a l l i tems. The seri es has been

recomputed us ing a new methodol ogy that is a l igned with PSA's method of computi ng the

officia l core inflation, which re-weights remai ning i tems to comprise 100 percent of the core

basket after excl uding non-core items . The previ ous methodol ogy reta i ned the weights of

vol ati le items i n the CPI bas ket whil e keeping their i ndi ces cons tant at 100.0 from month to month.

Source: PSA, BSP estimates

0

1

2

3

4

5

6

7

8

9

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2013 2014 2015 2016

Headline Inflation

Food Inflation

Non-Food Inflation


NCR inflation slows down on

lower prices of non-food

items…

In terms of price development by area, inflation in

the National Capital Region (NCR) dropped anew to

0.3 percent from 0.8 percent in the previous quarter

as non-food items continued to pull down inflation.

Prices of oil-related CPI items such as electricity, gas,

and other fuels as well as operation of personal

transport equipment16 remained negative for the

sixth consecutive quarter in Q1 2016.

On the other hand, the following food items posted

higher inflation rates within NCR during the quarter:

corn, meat, milk, cheese, and eggs along with

vegetables. Rice inflation continued to decline

relative to year-ago levels due mainly to higher

supply arising from importations and onset of the

harvest season.

… while inflation in AONCR rises

For areas outside NCR (AONCR), inflation continued

to accelerate at 1.3 percent in Q1 2016 from

1.0 percent in the previous quarter, as both food and

non-food items increased.

Higher price increases in corn along with milk,

cheese, and eggs, both of which were previously

decreasing, boosted food inflation in AONCR in

Q1 2016. Likewise, year-on-year vegetable inflation

accelerated from the previous quarter, contributing

to higher food inflation.

In contrast to the national and NCR trend, non-food

inflation in AONCR increased in Q1 2016 as health

and catering services as well as medical products and

personal care and effects went up during the quarter.

It should be noted that inflation for electricity, gas,

and other fuels as well as transport remained in

negative territory.

16 This includes gas oils for motor vehicles.

Chart 7. Inflation Rate (2006=100)

in percent

Domestic Liquidity17

Money supply or M3 grew by 11.7 percent y-o-y as

of end-March 2016 to reach P8.5 trillion. This

growth was faster than the 9.4-percent expansion as

of end-December 2015.

The increase in M3 was driven largely by the

15.4-percent y-o-y growth in domestic claims or

credits to the domestic economy in March 2016.

Credits extended to the private sector grew by

12.8 percent, consistent with the sustained growth

in bank lending. Meanwhile, net claims on the

central government rose by 33.6 percent.

Net foreign assets (NFA) in peso terms rose by

5.8 percent y-o-y in March 2016. The BSP’s NFA

position continued to expand on the back of robust

foreign exchange inflows coming mainly from

overseas Filipinos’ remittances, business process

outsourcing receipts, and portfolio investments.

Meanwhile, the NFA of banks also increased, driven

largely by the increase in banks’ foreign assets

resulting from investments in marketable debt

securities.

17 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.

0

1

2

3

4

5

6

2013 2014 2015 2016

Philippines National Capital Region Areas Outside the National Capital Region


Table 2. Domestic Liquidity (M3)

Levels (in billion pesos) Growth Rates

(in %)

Particulars Mar

2016

Dec

2015

Mar

2015

Quarter

On

Quarter

Year

On

Year

Domestic

Liquidity (M3), 8,548.0 8,426.2 7,650.0 1.4 11.7

of which:

Net Foreign

Assets 4,100.1 3,998.8 3,875.6 2.5 5.8

Domestic

Claims 8,077.4 7,860.5 6,997.4 2.8 15.4

of which:

Net Claims

on Central

Government

1,465.8 1,263.0 1,096.9 16.1 33.6

Claims on

Other Sectors 6,611.5 6,597.4 5,900.4 0.2 12.1

Source: Department of Economic Statistics, Bangko Sentral ng Pilipinas

Domestic Interest Rates

The primary market rates of the 91-day, 182-day,

and 364-day treasury bills (T-bill) declined to

1.56 percent, 1.58 percent and 1.72 percent in Q1

2016 from the Q4 2015 rates of 1.71 percent,

1.70 percent and 1.90 percent, respectively. The

lower primary market rates reflected market

preference for short-term papers amid economic

slowdown in China and expected delay in further US

policy rate increases.

Primary market interest rates fall

across the board

Similarly, the secondary market yields of

government securities (GS) for most maturities

decreased as of end-March 2016 relative to yields as

of end-December 2015.

Yields of secondary market GS

mostly decline

The yields of most tenors dropped by at least

29.0 bps (20-year) to at most 102.3 bps (6-month)

amid subdued global growth prospects. Meanwhile,

the yields of 3-year and 10-year GS increased by

2.8 bps and 59.0 bps, respectively.

Chart 8. Yield Curve of Government Securities

in percent

Domestic market interest rates showed mixed

trends, reflecting global uncertainty. The savings

deposit and time deposit rates were slightly higher in

Q1 2016 by 1.0 bp and 1.2 bps, respectively.

Meanwhile, the bank lending and interbank call

loans rates were lower by 10.8 bps and 0.02 bps,

respectively.

Other market interest rates

show mixed trends

The differentials (gross and net of tax) between the

domestic and US interest rates narrowed in Q1 2016

relative to Q4 2015. The 14.5 bps decrease in the

average RP 91-day T-bill rate led to the lower

differential against the average US 90 -day T-bill rate

and LIBOR which increased by 7.9 bps and 21.6 bps,

respectively. Higher foreign interest rates reflected

investor optimism following the release of stronger-

than-expected US manufacturing activity during the

quarter.

Adjusted for risk premium,

interest rate differentials narrow

The positive differential between the BSP's policy

interest rate (overnight borrowing or RRP rate) and

the US Federal Funds target rate persisted at 350

bps as of end-March 2016, as the US Federal Funds

target rate and the RRP rate remained unchanged

during the quarter. Compared to its December 2015

value, the risk-adjusted spread between the two

policy rates widened by 17.8 bps in March 2016, due

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 2015 Q2 2015 Q3 2015


to lower risk premium (measured as the difference

between the 10-year ROP and the 10-year US note).

The decline in the risk premium was traced to a

66.6-bp decrease in the yields of 10-year ROP note

amid a more modest 48.8-bp decrease in the yields

of the 10-year US Treasury note.

Monetary Policy Developments

During its monetary policy meetings on

11 February and 23 March, the BSP decided to

maintain its key policy interest rates at

4.0 percent for the overnight borrowing or RRP

facility and 6.0 percent for the overnight lending or

RP facility. The interest rates on term RRPs, RPs, and

SDAs were also kept steady. Similarly, the reserve

requirement ratios were left unchanged.

BSP maintains monetary policy

settings

The BSP’s assessment of a manageable inflation

outlook and robust growth conditions continue to

support steady monetary policy settings. Latest

forecasts indicate that average inflation is likely to

settle within the target range of 3.0 percent ± 1

percentage point for 2016-2017, while inflation

expectations continue to be firmly anchored within

the inflation target band over the policy horizon.

The BSP also noted that the risks surrounding the

inflation outlook have shifted slightly to the

downside. Downward price pressures could arise

from slower-than-expected global economic activity

and potential second-round effects from lower

international oil prices. Meanwhile, upside risks to

the inflation outlook persist, particularly those that

could emanate from the impact of El Niño dry

weather conditions on food prices and utility rates as

well as pending petitions for power rate

adjustments.

The BSP observed that domestic demand conditions

are likely to stay firm, supported by solid private

household and capital spending, buoyant business

sentiment, and adequate credit and domestic

liquidity. The BSP also recognized that uncertainty

over economic growth prospects across the globe

could continue to drive volatility in global financial

markets.

Given these considerations, the BSP affirmed the

need to keep a watchful eye over domestic and

external developments to ensure that the monetary

policy stance remains in line with the BSP’s price and

financial stability objectives.

Financial Sector

Banking System

Financial Sector

The Philippine banking system continues to be

resilient as it supports long-term economic growth.

Banks’ balance sheets were marked by a steady

growth in assets and deposits. Asset quality

indicators showed mix trends, while capital

adequacy ratios remained above international

standards, even with the implementation of the

tighter Basel III framework.

Philippine banking system posts

steady growth in assets and

deposits

Banks continued to dominate the financial sector,

with universal and commercial banks (U/KBs)

accounting for 90 percent of total banks’ assets. In

terms of the number of head offices and

branches/agencies, non-bank financial

intermediaries had a wider physical network than

banks, consisting mainly of pawnshops.


Performance of the Banking System

Market Size

The number of banking institutions (head offices) fell

to 632 as of end-December 2015 from the year-

and quarter- ago levels of 648 and 635, respectively,

indicating continued consolidation of banks as well

as the exit of weaker players in the banking system.

By banking classification, banks (head offices)

consisted of 40 U/KBs, 68 thrift banks (TBs), and

524 rural banks (RBs). Meanwhile, the operating

network (head offices and branches/agencies) of the

banking system expanded to 10,756 offices in Q4

2015 from 10,361 offices during the same period in

the previous year and 10,561 offices in Q3 2015, due

mainly to the increase in the branches/agencies of

U/KBs, TBs and RBs.

Number of banks declines, but

operating network expands

The total resources of the banking system grew by

10.1 percent to P12.5 trillion as of end-March 2016

from the year-ago level of P11.4 trillion, and by

0.9 percent from the P12.4 trillion level posted a

quarter-ago. As a percent of GDP, total resources

stood at 92.5 percent.

Chart 9. Total Resources of the Banking System

Levels in trillion pesos; share in percent

Savings Mobilization

Savings and demand deposits were the primary

sources of funds for the banking system. Banks’

total deposits18 as of end-March 2016 amounted to

P7.4 trillion, 11.3 percent or P0.8 trillion higher than

the year-ago level.

Demand and savings deposits

expand while time deposit

declines

On a quarterly basis, the 2.2 percent growth in

deposits was lower than the 6.4 percent growth

posted in the previous quarter. Demand and savings

deposits expanded by 3.7 percent and 3.0 percent,

respectively19, while time deposits declined by

0.7 percent. On the other hand, foreign currency

deposits owned by residents (FCD-Residents) grew

by 2.1 percent to P1.5 trillion.20

Chart 10. Deposit Liabilities of Banks

in billion pesos

Bank Lending Operations

Outstanding loans of UKBs as of end-March 2016,

net of banks' RRP placements with the BSP grew by

14.8 percent y-o-y and by 0.1 percent q-o-q.

Similarly, bank lending inclusive of RRPs increased

by 13.5 percent during the same period. Commercial

banks' loans have been increasing steadily at a

double-digit pace y-o-y since January 2011.

18 This refers to the total peso-denominated deposits of the banking

system. 19 Along with the savings, time and demand deposits, M3 includes currency

in circulation and deposit substitutes. 20 M4 is the sum of M3 and FCD-Residents. Along with savings, time and

demand deposits, M3 includes currency in circulation and deposit


Bank lending sustains growth

y-o-y

Loans for production activities, which comprised

81.4 percent of banks’ aggregate loan portfolio,

expanded by 15.0 percent y-o-y in March. The

growth in production loans was driven primarily by

increased lending to the following sectors: real

estate activities (20.2 percent); electricity, gas,

steam and airconditioning supply (31.8 percent);

wholesale and retail trade, repair of motor vehicles

and motorcycles (13.6 percent); financial and

insurance activities (10.6 percent); and information

and communication (28.0 percent). Bank lending to

other sectors likewise expanded during the month

except for professional, scientific, and technical

activities which declined by 9.6 percent. Similarly,

loans for household consumption grew by

15.9 percent due to sustained growth in credit card

loans, motor vehicle loans, and salary-based general

purpose loans.

Chart 11. Loans Outstanding of Commercial Banks (Gross

of RRPs)

in trillion pesos

Credit Card Receivables

The combined credit card receivables (CCRs) of

U/KBs and TBs as of end-December 2015, inclusive

of credit card subsidiaries, increased by 9.1 percent

to P179.3 billion relative to the previous year’s level

of P164.3 billion.

Credit card receivables

continue to rise

Meanwhile, the ratio of CCRs to the total loan

portfolio (TLP) was at 2.9 percent, lower than the

3.0 percent registered a year ago. In terms of loan

quality, despite the 0.7 percent increase in non-

performing CCRs, its ratio to total CCRs improved to

7.6 percent from the previous year’s 8.2 percent

mainly due to the increase in total CCRs.

Motor Vehicle Loans21

The combined motor vehicle loans (MVLs) of U/KBs

and TBs, inclusive of non-bank subsidiaries,

increased by 32.1 percent to P303.9 billion as of end-

December 2015 from P230.1 billion a year ago and

by 7.2 percent from P238.6 billion a quarter ago.

Motor vehicle loans maintain

strong growth

Consumers’ strong demand for passenger cars

(particularly, the sub-compact cars) and commercial

vehicles, introduction of new and refreshed models,

appropriate product mix, as well as flexible financing

schemes from banks and other car financing firms

helped sustain the rise in vehicle purchases. The

share of total MVLs to TLP, exclusive of interbank

loans, remained at 4.9 percent relative to previous

quarter. In terms of loan quality, the ratio of non-

performing MVLs to total MVLs declined to

4.6 percent from 4.8 percent posted in Q3 2015.

Salary-Based General-Purpose Consumption Loans22

Salary Based General-Purpose Consumption Loans

(SBGPCL) extended by U/KBs and TBs, inclusive of

non-bank subsidiaries, increased significantly by

68.1 percent to P104.3 billion as of end-December

2015 from the year-ago level of P62.1 billion23 and

21 Renamed effective September 2015 (formerly Auto Loans) 22 Formerly Salary Loans 23 Data collection started with June 2014 data.


by 7.2 percent from the quarter-ago level of

P97.2 billion.

Salary loans register the highest

growth among other consumer

loan types

The share of total SBGPCLs to TLP, exclusive of

interbank loans, of 1.7 percent was similar to that

posted in Q3 2015. In terms of loan quality, the ratio

of non-performing SBGPCLs to total SBGPCLs

declined to 3.9 percent from 4.2 percent posted in

Q3 2015.

Residential Real Estate Loans

As of end-December 2015, the combined residential

real estate loans (RRELs) grew by 11.5 percent to

P444.0 billion from P398.2 billion a year-ago, and by

5.5 percent relative to the previous quarter’s level of

P420.9 billion.

Residential real estate loans

continue to grow

Sustained household investments in residential

properties, the slow rise in the cost of construction

materials, the increase in the number of projects

unveiled by real estate developers as well as banks’

intensified promotional campaigns supported the

growth in real estate purchases during the review

period. Total RRELs to TLP slightly decreased to

7.2 percent, relative to the previous quarter’s ratio

of 7.3 percent. By industry, U/KBs held a bigger slice

of the total residential real estate exposure at

58.1 percent (P258.0 billion), while TBs accounted

for the remaining 41.9 percent (P186.1 billion). In

terms of loan quality, with respect to the previous

quarter’s ratio, the non-performing RRELs still

remained at 3.1 percent of total RRELs of U/KBs and

TBs.

Asset Quality and Capital Adequacy

The Philippine banking system’s gross

non-performing loan (GNPL) ratio of 2.2 percent as

of end-March 2016 was an improvement from the

previous year’s level of 2.5 percent, but slightly

higher than the quarter-ago level of 2.1 percent.24

Banks’ initiatives to improve their asset quality along

with prudent lending regulations helped maintain

the GNPL ratio below its pre-Asian crisis level of

3.5 percent.25 The increase reflected the combined

effect of the GNPL increase of P8.7 billion, from

P136.5 billion in Q4 2015 to P145.2 billion in Q1

2016, and the contraction in the banking system’s

TLP by P20.7 billion. Similarly, the net non-

performing loan (NNPL) ratio increased, though

mildly, to 0.8 percent relative to the 0.7 percent

posted a year ago, and 0.6 percent a quarter ago. In

computing for the NNPLs, specific allowances for

credit losses26 on TLP are deducted from the GNPLs.

The said allowances decreased to P94.3 billion in

end-March 2016 from P94.6 billion posted a quarter

ago.

Chart 12. Ratio of Gross NPLs and Net NPLs to Total

Loans of the Banking System

in percent

The Philippine banking system’s GNPL ratio of

2.2 percent was higher relative to South Korea

(1.7 percent) and Malaysia (1.2 percent), but lower

24 For comparative purposes, computations for periods prior to January

2013 are aligned with Circular No. 772. Certain ratios were rounded-off to

the nearest hundredths to show marginal movements. 25 The 3.5 percent NPL ratio was based on the pre-2013 definition. 26 This type of provisioning applies to loan accounts classified under loans

especially mentioned (LEM), substandard-secured loans, substandard-

unsecured loans, doubtful accounts and loans considered as loss accounts.


when compared with Thailand (2.6 percent) and

Indonesia (2.4 percent).27

The loan exposures of banks remained adequately

covered as the banking system registered an NPL

coverage ratio of 112.7 percent. The Q1 2016

coverage ratio was lower than the 116.4 percent

registered a year ago and the 118.4 percent posted

in end-December 2015. The ratio is indicative of

banks’ continued compliance with the loan-loss

provisioning requirements of the BSP to ensure

adequate buffers against potential credit losses.

Banks maintain high levels of

CAR amid tighter capital

requirements

Compliance with the BSP capital framework for

U/KBs under the Basel III framework28 took effect on

1 January 2014. The new Basel III regime

incorporates adjustments to the treatment of bank

capital in ways that enhance the use of the capital

adequacy ratio (CAR) as a prudential measure.

The CAR of U/KBs stood at 15.55 percent on solo

basis and 16.40 percent on consolidated basis at the

end of the third quarter in 2015. These figures are

well-above the BSP regulatory threshold of

10.0 percent and international minimum of

8.0 percent. The banks’ latest CAR on solo basis rose

quarter-on-quarter from the 15.48 percent posted at

end-June last year. On the other hand, U/KBs’ CAR

on consolidated basis at end-September last year

slightly declined from the 16.42 percent posted a

quarter earlier.

27 Sources: IMF and financial stability reports, Indonesia (Banks’

Nonperforming Loans to Gross Loans Ratio, Q4 2015); Malaysia (Banking

System’s Net Impaired Loans, Q1 2016); Thailand (Total Financial

Institutions’ Gross NPLs, Q1 2016); and South Korea (Domestic Banks’

Substandard or Below Loans [SBLs], Q1 2016). 28 Basel III no longer counts towards “bank capital” those Basel II-compliant

capital instruments that do not have the feature of loss absorbency. Loss

absorbency refers to the ability of bank-eligible capital instruments other

than common equity to behave and act in the same way as common equity

shares at the point where the bank takes losses and becomes non-viable.

In addition, Basel III now deducts from capital the investments of banks in

non-allied undertakings, defined benefit pension fund assets, goodwill and

other intangible assets.

The industry’s capitalization remains predominantly

composed of Common Equity Tier 1 (CET 1), the

highest quality among instruments eligible as bank

capital. The CET 1 of U/KBs increased quarter-on-

quarter to 12.99 percent and 13.92 percent of risk

weighted assets (RWA) from 12.87 percent and

13.89 percent last quarter on both solo and

consolidated bases, respectively. Their Tier 1 ratio

also grew to 13.18 percent and 14.08 percent from

13.06 percent and 14.05 percent last quarter on

both solo and consolidated bases, respectively. Tier

1 is composed of common equity and qualified

capital instruments. Both CET 1 and Tier 1 ratios of

U/KBs were also above the BSP thresholds of

6.0 percent and 7.5 percent, respectively.

Said capital ratios increased amid the U/KBs’

profitable operations and issuance of new shares as

well as the infusion of foreign bank capital.

Chart 13. Capital Adequacy Ratio of Universal and

Commercial Banks

in percent

The CAR of U/KBs on a consolidated basis at

16.4 percent was higher than South Korea

(14.0 percent), but lower compared to those of

Indonesia (21.3 percent), Thailand (17.5 percent),

and Malaysia (16.5 percent).29

29 Sources: IMF and financial stability reports, Indonesia (Commercial Banks,

Regulatory Capital to Risk-Weighted Assets Ratio Q4 2015); Thailand

(Commercial Banks’ Capital Funds Percentage of Risk Assets, Q1 2016);

Malaysia (Banking System’s Total Capital Ratio, Q1 2016); and South Korea

(Domestic Banks’ Capital Ratio, Q1 2016).


Banking Policies

Banking policies implemented during the quarter

were aimed at enhancing/providing guidelines on

the following: (1) public and/or publicly-guaranteed

foreign loan agreement and other agreements which

give rise to a foreign/foreign currency obligation of

the public sector; (2) agricultural value chain

financing framework; (3) Unit Investment Trust Fund

(UITF); (4) Basel III framework on liquidity standards

- liquidity coverage ratio and disclosure standards;

(5) phased lifting of the moratorium on the grant of

new banking license or establishment of new

domestic banks; (6) activities and services allowable

for micro-banking offices; and (7) operational risk

management and outsourcing; and (8) cooling-off

provisions of the BSP regulations on financial

consumer protection.

Capital Market Reforms

Capital market policy reforms continued to gain

ground during the first quarter of 2016 as the BSP

and other government agencies, as well as the

private sector adopted measures to develop further

the Philippine capital market. During the period, the

reforms focused on providing flexibility in raising

foreign capital and encouraging more foreign

investors to invest in the country (see Annex B).

Stock Market

In the first three months of 2016, the Philippine

Stock Exchange index (PSEi) averaged

6,766.4 index points, lower by 3.4 percent from the

average of 7,002.8 index points posted in the

preceding quarter. Persistent anxiety over weak

global growth, exacerbated by China’s bumpy

economic transition to a more sustainable growth,

the threat of plunging oil prices and deepening

monetary policy divergence in advance economies

dampened sentiments.

External headwinds dampen

stock trading

However, despite the q-o-q decline, the index

generally trended upwards during the period. In

January 2016, the local bourse hit bear territory with

the benchmark index posting its lowest in

23 months at 6,084.3 index points on 21 January,

which was about 25.1 percent below the peak

posted in April 2015 of 8,127.5 index points.30 The

drop mirrored the global sell-off triggered by

developments in China, the rising geopolitical

tensions in the Middle East, falling oil prices and

concerns on the continued normalization of US

interest rates.

After, bottoming out in January, the PSEi began to

rally in February and eventually closed the quarter

higher. The US Fed’s decision to defer further

interest rates hikes, the People’s Bank of China’s

continued liquidity injection and monetary easing,

the Bank of Japan’s negative interest rates, the

European Central Bank’s aggressive stimulus

program and the recovery of global crude oil prices

from US$30 per barrel to the US$40 per barrel level

saw investors’ risk appetite improve. Moreover,

reports of generally positive earnings by domestic

firms in the last quarter of 2015 also encouraged the

return of foreign investors in the local bourse.

From the low posted in January, the main index

lifted to reach a seven-month peak of

7,376.4 index points posted on 21 March, about

21.2 percent higher than the low registered in

January.

30 The PSEi actually entered bear territory on 11 January 2016, as it closed

at 6,288.26 index points, about 22.6 percent below the peak in April 2015.


Chart 14. Average PSEi

in index points

This technically placed local equities in bull territory

for most of the remaining days of March. However,

gains were tempered by investors’ cautious stance

ahead of the presidential elections and the release

of listed companies’ first-quarter earnings results in

May. In end-March, the PSEi closed at

7,262.3 index points, 4.5 percent higher year-to-

date.

The general improvement in investor appetite was

reflected in foreign investors’ return to the local

bourse in March. From being net sellers of

P2.2 billion and P4.0 billion in January and February,

respectively, foreign investors reverted back to being

net purchasers of P9.6 billion worth of local stocks in

March. Year-to-date, this brings foreign investor

transactions in the local bourse, which accounted for

about 50.1 percent of the total investors’

transactions in the first three months of 2016, to an

aggregate net purchase of P3.5 billion worth of

shares.

Foreign investors return to local

bourse

Other stock market indicators similarly mirrored

improved sentiments in the latter half of the quarter

in review. After posting a decline to P12.6 trillion in

January 2016 from P13.5 trillion in end-2015, total

stock market capitalization rose to P13.9 trillion in

end-March. But thus far the Philippine stock market

has yet to see an initial public offering (IPO) during

the period. On the other hand, data from Bloomberg

indicated that the Philippine price-earnings ratio

improved slightly from an average of 20.07x in Q4

2015 to 20.11x during the quarter-in-review. At this

level, Philippine shares remain the second most

expensive in the ASEAN5 region, after Indonesia‘s

27.35x.

Chart 15. PSEi Foreign Transactions

in billion pesos, as of 31 March 2016

Meanwhile, the average indices of seven of the

nine Asia-Pacific stock indices monitored declined in

Q1 2016 relative to the preceding quarter. The

decline was led by China, which fell by

16.1 percent q-o-q, followed by Hong Kong

(-11.4 percent), Singapore (-7.6 percent), Australia

(-3.2 percent), Thailand (-3.1 percent) and Malaysia

(-0.3 percent). The Philippines was in the middle of

the pack, declining by 3.4 percent q-o-q. In contrast,

the remaining two markets, New Zealand and

Indonesia, outperformed the rest of the region

posting positive growths q-o-q. Indonesian stocks

rose 4.0 percent largely due to Indonesia’s

rebounding economy, accelerating infrastructure

spending and the three policy rate cuts made by

Bank Indonesia during the quarter. New Zealand

stocks, on the other hand, increased by 5.0 percent,

benefiting from the steady appreciation of investors’

risk appetite on expectations that the US Fed will

proceed slowly on any further increases in US policy

interest rates and following the RBNZ’s surprise rate

cut in March.


Chart 16. PSE Market Capitalization by Sector

end-March 2016, Percent share (%)

Chart 17. Quarter-on-Quarter Performance on Asia-

Pacific Stock Markets (%)

Bond Market

Local Currency Bond Market

Size and Composition31

Local currency (LCY) bonds issued by both the public

and private sectors amounted to P141.2 billion in Q1

2016, 57.1 percent higher than the P89.9 billion

registered in the previous quarter and 38.4 percent

higher than the P102.0 billion recorded in the same

period last year.

31 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. Source:

Bureau of the Treasury, Bloomberg, Staff calculation

LCY bond issuances of public

sector increase

The NG issued Treasury bills (T-bills) and Fixed-rate

Treasury bonds (T-bonds) amounting to a total of

P132.2 billion which increased by 104.5 percent

from Q4 2015. Meanwhile, the private sector

issuance of LCY bonds amounted to P9.0 billion,

64.3 percent lower than the Q4 level and

25.3 percent lower than Q1 last year. The low

activity by the corporates reflects the risk of higher

interest payments as the Fed starts to normalize.

Chart 18. LCY Bond Issuances

in billion pesos

Source: Bureau of the Treasury, Bloomberg, Staff calculation

In terms of market share, issuances from the NG

continued to dominate the domestic securities

market, comprising 93.6 percent of the total bond

issuances while the private sector comprised the

remaining 6.4 percent. Bonds issued by the BTr

accounted for the entire public sector issuance while

issuers from the private sector came from non-

financial corporations and real estate.

Chart 19. LCY Bond Issuances

As % of market share

Source: Bureau of the Treasury, Bloomberg, Staff calculation


Primary Market 32

In the primary auctions conducted for both T-bills

and T-bonds, the NG offered a total of P135.0 billion

of both short- and long-term debt securities in Q1

2016. Demand was robust as tenders were

oversubscribed by 2.1 times. Tenders for T-bills

reached P135.3 billion as against the NG’s offering of

P60.0 billion while for T-bond, tenders reached

P160.9 billion against the P75.0 billion offering.

The NG partially awards bids for

T-bonds due to higher yields

demanded

The NG partially awarded P132.2 billion in GS,

P60.0 billion in T-bills and P72.2 billion in T-bonds.

The higher rates demanded by investors led the NG

to accept partially bids for T-bills and T-bonds in

some of the auctions conducted during the first

quarter. Demand for shorter-term debt instrument

was higher as the market traded on a wait-and-see

stance for longer debt papers due to concerns over a

weakening Chinese economy and the pace and

timing of the US Fed’s monetary policy

normalization.

Secondary Market

Trading of both government and private corporate

bonds in the secondary market increased by

124.9 percent to P895.7 billion from P398.2 billion

registered in the previous quarter. On a y-o-y basis,

trading in the secondary market declined by

40.8 percent.

Trading increases at the

secondary market

Trading at the Fixed Income Exchange (FIE) was

dominated mostly by Fixed Income Treasury Notes

(FITNs), which accounted for about 93 percent of the

total trading followed by T-bills with 3.5 percent

share, retail T-bonds (RTBs) with 2.5 percent, and

32 The discussion includes primary market for government issuances only.

corporate bonds with 1 percent. The lukewarm

trading at the secondary market reflected investors

trading cautiously over concerns of a weakening

Chinese economy and the anticipated hikes in the

Fed funds rate.

Chart 20. Secondary Market Volume

in billion pesos

Source: Philippine Dealing and Exchange Corp.

Foreign Currency Bond Market

The government raised funds in the offshore market

that issued US$2 billion worth of new 25-year US

dollar bonds in the first quarter of 2016. The bonds

were priced at par with a coupon of 3.7 percent, the

lowest coupon ever issued on a global basis. This is

also the first sovereign USD bond issuance and the

longest-dated USD bond issuance from Asia during

the quarter.

The NG taps the international

bond market in raising funds

The proceeds of the issuance will be used to fund

the country’s switch and tender offer33, and related

expenses while the remaining amounts will be used

for general purposes including budgetary support.

33 The tender offer exercise targeted existing bondholders to switch into

the new Global Bonds. Bonds with a total notional value of USD 5.6 billion

were submitted for the switch tender offer and the NG accepted a market

value of USD 1.5 billion from the submissions.


Credit Risk Assessment

Philippine sovereign credit rating remained

unchanged in Q1 2016. The latest credit assessment

was Moody’s credit rating of Philippine banks in

November 2015. Moody’s Investor Service gave

Philippine banks a “stable” outlook after it upgraded

the credit ratings of various banks in the country.

The stable outlook means that the new and higher

credit ratings of banks are likely to be maintained

over the short term.

Philippine sovereign credit

rating is unchanged

Among the banks whose credit ratings were revised

recently include Banco de Oro, Metropolitan Bank

and Trust Co., Bank of the Philippine Islands, Land

Bank of the Philippines, Philippine National Bank,

and Rizal Commercial Banking Corp. Moody’s said

the Philippine banks’ resilience to stress is positive

compared to other banking systems around the

world.

Table 3. Latest Philippine Sovereign Credit Ratings

as of March 2016

Bond Spreads

Bond Spreads

Bond spreads

Bond spreads

The cost of insuring Philippine sovereign debt

increased in the first quarter of 2016. The country’s

5-year sovereign credit default swap (CDS) spreads

averaged 119 bps in Q1 2016, up from the Q4 2015

average of 107 bps. Against those of neighboring

economies, the Philippine CDS traded lower than

Indonesia’s average of 231 bps, Malaysia’s 182 bps

and Thailand’s 151 bps. Meanwhile, the risk

premium from holding a Philippine sovereign bond

over a similarly tenored US Treasury bond slightly

climbed as indicated by the wider EMBIG Philippine

spreads which averaged 124 bps, higher than the

previous quarter’s 123 bps.

Debt spreads widen due to

uncertainty on the external

front

In January 2016, debt spreads took a negative

turnaround, widening to levels last seen during the

taper tantrum in 2013. Investors traded on a safe-

haven mode that pushed yields of US Treasury bonds

lower while raising yields of the relatively risky

emerging market bonds higher (including the

Philippines) which resulted in wider debt spreads.

The rout in China’s financial market sapped

investors’ risk appetite away from higher yielding

emerging market assets, which wiped out gains from

most of Asia’s equities market and weakened their

currencies against the US dollar. Investors were also

surprised as the Bank of Japan adopted a negative

interest rate strategy.

Chart 21. 5-Year CDS Spreads of Selected ASEAN

Countries

in basis points

In February 2016, debt spreads further widened as

concerns over China and the continued drop in oil

prices spurred market jitters. China’s foreign-

exchange reserves shrank by US$99.5 billion in

January to US$3.23 trillion, the lowest level since

2012. Meanwhile, talks between Venezuela and

Saudi Arabia failed to mitigate oil supply issues.

In March, debt spreads narrowed as the global

economic and financial environment remained calm.

0

50

100

150

200

250

300

350

Jan

-…

Feb

-…

Ma

r…

Ap

r-…

Ma

y…

Jun

-…

Jul-

14

Au

g-…

Sep

-…

Oct

-…

No

v…

De

c-…

Jan

-…

Feb

-…

Ma

r…

Ap

r-…

Ma

y…

Jun

-…

Jul-

15

Au

g-…

Sep

-…

Oct

-…

No

v…

De

c-…

Jan

-…

Feb

-…

Ma

r…

Philippines Indonesia

As of 31

Mar

IDN: 197

MLY: 153

THA: 130

LOWEST

(2013-

2015)

PEAK

(2013-

2015)

Dec 16 '15

(US Fed hike)

IND: 237 bps

MLY: 190 bps

THA:138

PHL: 111 bps

Jan 4 '16

(China

stockmarket

selloff)

IND: 245 bps

MLY: 193 bps

THA: 145 bps

PHL: 117 bps

Latest Philippine Sovereign Credit Ratings

as of March 2016

aRating

Agency

Local Currency

(LT/ST)

Foreign Currency

(LT/ST)

Outlook

S&P BBB/A2 BBB/A2 Stable

Moody's Baa2/.n.a. Baa2/n.a. Stable

Fitch BBB-/F3 BBB/n.a. Positive


Yields continued to decrease as investors stay

cautious and away from high risk assets.

By 31 March, the Philippines 5-year sovereign CDS

stood at 104 bps, lower than the 109 bps in end-

2015 and has remained lower than Indonesia’s

197 bps, Malaysia’s 153 bps and Thailand’s 130 bps.

The EMBIG Philippines also ended the quarter

narrower at 107 bps compared to the previous

quarter’s closing of 124 bps.

Chart 22. EMBIG Spreads of Selected ASEAN Countries

in basis points

Payments and Settlements System34

In Q1 2016, the total number of transactions settled

and processed in the Philippine Payments and

Settlements System (PhilPaSS) increased by

3.7 percent to 372,734 from the previous quarter’s

level of 359,562. The uptick in volume was due to

the increase in trading of government securities via

expanded delivery-versus-payment (eDvp)

(127.5 percent), and interbank transactions

(2.7 percent) partially negated by the decline in

transactions on Overseas Filipino (OF) remittances

coursed through the REMIT system (3.0 percent).

Both volume and value of

PhilPaSS transactions increase

Similarly, the total value of transactions increased by

15.4 percent to P76.4 trillion from the previous

quarter’s level of P66.2 trillion. The upswing was due

34 Starting 1 April 2014, the volume and value of transactions exclude

payment transfers to BSP Payments Unit.

to the increase in the following: RRP eTrading

(75.8 percent), SDA placements with the BSP

Treasury Department (TD) (14.4 percent), and

interbank transactions (14.1 percent).

On a y-o-y basis, the volume and value of

transactions increased by 9.5 percent and

9.0 percent, respectively.

The total revenue derived from PhilPaSS operations

reached P35.2 million, 10.2 percent higher than the

previous quarter, but 1.1 percent lower relative to

previous year’s level. The q-o-q increase was mainly

due to higher volume of transactions, particularly

interbank and third party systems.

Table 4. PhilPaSS Transactions

2016

2015

Growth rates

(%)

Q1 Q4 Q1 Q-o-Q Y-o-Y

Volume 372,734 359,562 340,533 3.7 9.5

Value (in Trillion

PhP) 76.4 66.2 70.1 15.4 9.0

Transaction Fees

(in Mln PhP) 35.2 32.0 35.6 10.2 -1.1

Source: Payments and Settlements Office, Bangko Sentral ng

Pilipinas

External Sector

Balance of Payments

The country’s balance of payments position yielded a

deficit of US$210 million in Q1 2016, a reversal of

the US$877 million surplus registered in Q1 2015.

BOP position reverses to a

deficit

The negative overall BOP position was a result of

higher net outflows (or net lending by residents to

the rest of the world) in the financial account, even

as the current account recorded a surplus. The

financial account recorded higher net outflows at

US$959 million stemming largely from the other

0

50

100

150

200

250

300

350

400

450

Jan

-14

Feb

-14

Ma

r-1

4

Ap

r-1

4

May

-14

Jun

-14

Jul-

14

Au

g-1

4

Sep

-14

Oct

-14

No

v-1

4

De

c-1

4

Jan

-15

Feb

-15

Ma

r-1

5

Ap

r-1

5

May

-15

Jun

-15

Jul-

15

Au

g-1

5

Sep

-15

Oct

-15

No

v-1

5

De

c-1

5

Jan

-16

Feb

-16

Ma

r-1

6

EMBIG Philippines

EMBIG Malaysia

EMBIG Indonesia

As of 31 Mar

Indonesia: 299 bps

Malaysia: 208 bps

Philippines: 107 bps

Dec 16 '15

(US Fed hike)

Indonesia: 340 bps

Malaysia: 232 bps

Philippines:125

bps

Jan 4 '16

(China stockmarket

selloff)

Indonesia: 330 bps

Malaysia: 228 bps

Philippines: 127

bps


investment account, particularly residents’ net

repayment of loans and placement of deposits

abroad. Meanwhile, the current account registered

a lower surplus at US$447 million as the trade-in-

goods deficit widened significantly with declining

exports and increasing imports. Global economic

activity softens in early 2016 even as growth in the

US, euro area and Japan continued to regain

momentum. In contrast, downturns were noted in

major emerging markets such as India and China.

The subdued economic outlook for emerging

markets dampened global growth prospects to

which several central banks responded by easing

monetary policy settings in order to stave off

deflationary pressures.

Table 5. Balance of Payments

in million US$

The current account registered a surplus of US$447

million (equivalent to 0.6 percent of GDP) in Q1

2016, lower than the US$2.2 billion surplus

(3.2 percent of GDP) posted in Q1 2015.

Current account surplus falls

sharply

The sharp decline in the current account surplus was

attributed to the significant widening of the

trade-in-goods deficit as merchandise exports fell

while merchandise imports increased. Higher net

receipts in the services, primary and secondary

income accounts kept the current account in surplus

territory, offsetting the widened trade-in-goods

deficit.35

35 Primary Income account (formerly the Income account) shows the flows

for the use of labor and financial resources between resident and non-

The trade-in-goods deficit widened to US$8 billion in

Q1 2016 from US$4.8 billion in Q1 2015 due to the

combined effects of the decline in exports of goods

by 11.9 percent and the expansion in imports of

goods by 12.8 percent.

Trade-in-goods deficit widens

Exports of goods declined to US$9.2 billion in Q1

2016 from US$10.5 billion in Q1 2015, as exports to

major trading partners notably the U.S., China and

Japan exhibited declines during the quarter. Weaker

exports were attributed mainly to manufactures,

which fell by 9.2 percent, particularly lower

shipments of chemicals, garments, machinery and

transport equipment, processed food and

beverages, and other manufactures. Lower exports

of coconut oil and mineral products such as copper

metal, gold and other mineral products also

contributed to the fall in total exports.

Exports of goods fall

Meanwhile, exports of non-consigned electronic

products and wood manufactures mitigated the

drop in manufactures, increasing by 7.4 percent and

52.3 percent, respectively. In addition, shipments of

refined sugar and fruits and vegetables such as

bananas and canned pineapples also helped mitigate

the fall in total exports.

Chart 23. Exports by Major Commodity Group

in percent share

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.

Balance of Payments ( in million US$)

2015 2016

Current Account 2165 447

Capital Account 17 25

Financial Account* 152 959

Net Unclassified Items -1153 277

Overall BOP 877 -210

Q1

*Positive balance in the financial account indicates net outflows

while a negative balance indicates net inflows. The overall BOP

position, therefore, is equal to the current account plus the capital

account minus the financial account plus net unclassified items.


Imports of goods amounted to US$17.3 billion in Q1

2016 higher than the US$15.3 billion posted in Q1

2015, due mainly to increased imports of capital

goods, raw materials and intermediate goods, and

consumer goods.

Imports of goods increase

Imports of capital goods increased by

49.2 percent, driven largely by higher imports of

power generating and specialized machines and

telecommunication equipment and electrical

machines. Imports of raw materials and

intermediate goods rose by 22.4 percent as imports

of semi-processed raw materials grew by

30.7 percent, particularly raw materials used to

manufacture non-consigned electronics. Likewise,

imports of consumer goods went up by 39.2 percent,

buoyed by higher imports of durables particularly

passenger cars and motorized cycles.

Meanwhile, imports of petroleum crude oil declined

by 24.7 percent as the price of crude oil in the

international market remained low. In terms of

volume, however, demand for imported oil

increased as importation of petroleum crude rose to

28 million barrels in Q1 2016 from 19 million barrels

in Q1 2015.36

Chart 24. Imports by Major Commodity Group

in percent share

36 Based on World Bank Commodities Price data, the average price of

Dubai crude oil in Jan-Mar 2016 declined to US$30.6/barrel from

US$52.2/barrel in Jan-Mar 2015.

Net receipts in trade-in-services rose to

US$1.5 billion in Q1 2016, compared to the

US$957 million net receipts in Q1 2015.

Net receipts in trade-in-services

rise

The 56.4 percent growth was due largely to the

decrease in net payments in travel services

combined with higher net receipts in technical,

trade-related and other business services

(5.7 percent),37 and computer services

(27.4 percent).38 Export revenues in business process

outsourcing services totaled US$4.7 billion in Q1

2016, or a growth of 15.0 percent from the

US$4.1 billion receipts in Q1 2015.

The primary income account recorded net receipts

of US$579 million in

Q1 2016, more than twice the US$265 million

netreceipts in Q1 2015. This was due largely to the

decline in payments of investment income

(by 10.8 percent) as residents paid lower dividends

to non-resident investors. The 1.5 percent increase

in compensation inflows from resident overseas

Filipino (OF) workers (US$1.9 billion) also

contributed to the increase in net receipts in primary

income.

Net receipts in primary income

expand

Net receipts in the secondary income account

reached US$6.4 billion in Q1 2016, 11.1 percent

higher than the US$5.7 billion net receipts in Q1

2015. The large net receipts were attributed mainly

to the US$5.6 billion personal transfers (which grew

by 3.0 percent). The bulk of these personal

transfers came from non-resident OF workers'

remittances (about 98 percent), which increased by

3.2 percent to US$5.5 billion. The steady demand for

skilled Filipino manpower overseas and the

37 Include manufacturing services on physical inputs owned by others,

mostly electronic products, and business process outsourcing (BPOs)

pertaining mostly to contact centers, animation, and medical

transcriptions. 38 Include BPOs pertaining to software publishing and development.


initiatives of banks and non-bank remittance service

providers to expand their international and domestic

market coverage through tie-ups abroad as well as

the introduction of innovations in their remittance

products continued to provide support to the

sustained inflow of remittances.

Net receipts in secondary

income increase

Net receipts in the capital account increased to

US$25 million in Q1 2016 from US$17 million in Q1

2015. Inflows arising from the NG’s receipts in other

capital transfers were higher during the quarter.

Capital account registers

higher net receipts

The financial account yielded net outflows (or net

lending by residents to the rest of the world) of

US$959 billion in Q1 2016, more than sixfold the

US$152 million net outflows in Q1 2015. This was

due mainly to the significant increase in net outflows

of other investments (by more than five times)

coupled with the reversal of portfolio investments to

net outflows from net inflows. These higher net

outflows, however, were partly offset by the reversal

of the direct investment account to net inflows from

net outflows during the quarter.

Net outflows in the financial

account rise markedly

International Reserves

The country’s gross international reserves (GIR) as of

end-March 2016 rose to US$83.0 billion, 2.9 percent

higher than its level as of end-December 2015. This

can cover 10.4 months’ worth of imports of goods

and payments of services and income. It is also

equivalent to 5.4 times the country’s short-term

external debt based on original maturity and

4.0 times based on residual maturity.

Gross international reserves

remain highly adequate

The increase in reserves was due mainly to the NG’s

net foreign currency deposits as well as the BSP’s

income from investments abroad as well as

revaluation adjustments on the BSP’s foreign

currency-denominated reserves. These were

partially offset by payments made by the NG for its

maturing foreign exchange obligations.

Of the total reserves as of end-March 2016,

86.0 percent were held in foreign investments;

9.4 percent in gold; and 4.6 percent in holdings of

Special Drawing Rights (SDRs), the BSP’s reserve

position in the IMF, and foreign exchange.

Net international reserves (NIR), which refer to the

difference between the BSP’s GIR and total short-

term liabilities, amounted to US$83.0 billion as of

end-March 2016, an increase of US$2.3 billion from

end-2015.

Chart 25. Gross International Reserves

in billion US dollars

Exchange Rate

The peso depreciated against the US dollar in the

first quarter of 2016. On a q-o-q basis, the peso

weakened by 0.9 percent to average P47.30/US$1

from the previous quarter’s average of P46.87/US$1.

On a y-o-y basis, the peso depreciated by 6.1 percent

relative to the P44.42/US$1 average in the first


quarter of 2015.39 The weakness of the peso during

the review quarter was due to the risk aversion

towards emerging market assets arising from

concerns on the Chinese economy and declining oil

prices.

The peso depreciates against

the US dollar

In January 2016, the peso weakened to average

P47.51/US$1 relative to the P47.23/US$1 average in

December 2015 on continued risk aversion towards

emerging market assets. The peso depreciated

further in February to average P47.64/US$1 on safe-

haven buying following the contraction in China’s

manufacturing sector.40 Meanwhile, the Bank of

Japan’s move to introduce a negative interest rate

policy rendered support for Asian currencies,

tempering the depreciation of the peso. In March,

the trend reversed as the peso appreciated to

average P46.72/US$1 on improved risk appetite

towards emerging market assets following

aggressive stimulus measures from the European

Central Bank and dovish statement on the outlook

for interest rates by the US Federal Reserve. Overall,

the sustained inflows of foreign exchange from

overseas Filipino remittances, foreign direct

investments, BPO and tourism receipts, as well as

the healthy level of gross international reserves and

the country’s robust economic growth provided

stability to the peso.41

On a year-to-date basis, the peso appreciated

against the US dollar by 2.2 percent on

31 March 2016 as it closed at P46.07/US$1, moving

in tandem with most Asian currencies, except the

Indian rupee which depreciated vis-à-vis the US.42

39 Dollar rates or the reciprocal of the peso-dollar rates were used to

compute for the percentage change. 40 Official manufacturing purchasing managers’ index fell to 49.4 in January

from 49.7 in December, marking the lowest level since August 2012 and the

sixth straight month of contraction. A reading below 50 indicates a

contraction. (Source: National Bureau of Statistics of China) 41 GIR stood at US$83.0 billion as of end-March 2016 (revised).

42 Based on the last done deal transaction in the afternoon.

Chart 26. Year-to-date Appreciation/Depreciation of

Asian Currencies against US dollar

in percent, as of 31 March 2016

Meanwhile, volatility, as measured by the coefficient

of variation (COV) of the peso’s daily closing rates

stood at 1.15 percent during the first quarter of

2016, slightly higher compared with the 0.93 percent

in the previous quarter.43

On a real trade-weighted basis, the peso lost

external price competitiveness in the first quarter of

2016, against the basket of currencies of all trading

partners (TPI), trading partners in advanced (TPI-A)

and developing countries (TPI-D) as the real effective

exchange rate (REER) index of the peso increased by

1.8 percent, 2.0 percent, and 1.7 percent,

respectively, relative to the fourth quarter of 2015.

These developed mainly on account of widening

inflation differential which more than offset the

nominal depreciation of the peso against these

currency baskets.44,45

43 The coefficient of variation is computed as the standard deviation of the

daily closing exchange rate divided by the average exchange rates for the

period. 44 The Trading Partners Index (TPI) measures the nominal and real effective

exchange rates of the peso across the currencies of 14 major trading

partners of the Philippines, which includes US, Euro Area, Japan, Australia,

China, Singapore, South Korea, Hong Kong, Malaysia, Taiwan, Indonesia,

Saudi Arabia, United Arab Emirates, and Thailand. The TPI-Advanced

measures the effective exchange rates of the peso across currencies of

trading partners in advanced countries comprising of the US, Japan, Euro

Area, and Australia. The TPI-Developing measures the effective exchange

rates of the peso across 10 currencies of partner developing countries

which includes China, Singapore, South Korea, Hong Kong, Malaysia,

Taiwan, Indonesia, Saudi Arabia, United Arab Emirates, and Thailand. 45 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.


Relative to the first quarter of 2015, the peso gained

external price competitiveness against the TPI, TPI-A,

and TPI-D baskets during the first quarter of 2016.

Against the TPI and TPI-D baskets, the combined

effects of the peso’s nominal depreciation and

narrowing inflation differential resulted in the real

depreciation of the peso by 3.3 percent and 1.6

percent, respectively. Meanwhile, the nominal

depreciation of the peso which more than offset the

widening inflation differential against the TPI-A

basket led to the real depreciation of the peso by

5.8 percent.

External Debt

Outstanding Philippine external debt stood at

US$77.6 billion as of end-March 2016, up by US$166

million (or 0.2 percent) from the end-December

2015 level of US$77.5 billion. Y-o-y, the debt stock

rose by US$2.3 billion (or 3.1 percent) from

US$75.3 billion in March 2015.

External debt stays

manageable

The increase in the debt levels during the first

quarter of 2016 was attributed to:

(a) foreign exchange (FX) revaluation adjustments

(US$814 million) as the US Dollar weakened,

particularly against the Japanese Yen; (b) previous

periods’ adjustments due to late reporting (US$609

million); and (c) increased investments in Philippine

debt papers by non-resident investors

(US$224 million). The upward impact of these

developments on debt stock was partially offset by

US$1.5 billion net repayments, mainly by banks.

Similarly, the y-o-y increase was due to the

following: (a) net availments (US$2.1 billion);

(b) previous periods’ adjustments (US$1.1 billion);

and (c) FX revaluation adjustments (US$577 million),

which were partially offset by the US$1.4 billion

decline in non-resident investments in Philippine

debt papers.

By Maturity

As of end-March 2016, the maturity profile of the

country’s external debt continued to be largely

medium- to long-term (MLT) [i.e., those with original

maturities longer than one (1) year] in tenor with

share to total external debt at 81.6 percent

(US$63.3 billion).

Short-term (ST) loans [or those with original

maturities of up to one (1) year] stood at

US$14.3 billion by the close of the first quarter of

2016 and accounted for the 18.4 percent balance of

debt stock.

By Borrower

Public sector external debt stood at US$38.9 billion

(or 50.1 percent of total debt stock), slightly higher

than the US$38.3 billion (49.4 percent of total debt

stock) as of end-2015 due to FX revaluation

adjustments (US$765 million) arising from a weaker

US Dollar.

Private sector debt, on the other hand, aggregated

US$38.7 billion (49.9 percent of total debt stock),

down by US$489 million q-o-q due to net

repayments of US$1.3 billion, mainly by banks.

The debt service ratio (DSR), which relates principal

and interest payments (debt service burden or DSB)

to exports of goods and receipts from services and

primary income, is a measure of the adequacy of the

country’s FX earnings to meet maturing obligations.

The ratio increased to 9.5 percent during the quarter

under review from 4.3 percent in end-2015.

The external debt ratio (a solvency indicator), or

total outstanding debt expressed as a percentage of

annual aggregate output (GNI) remained at the end-

2015 level of 21.9 percent. Using GDP as

denominator, the ratio was likewise unchanged at

26.5 percent.


Chart 27. Philippine External Debt

in percent, as of end-March 2016

Foreign Interest Rates

The timing of exit from accommodative monetary

policy in advance economies (AEs) will differ across

countries depending on the strength of their

economic growth. Accommodative monetary policy

is expected to continue in countries where the

recovery remains fragile due to weakness in labor

market conditions, slowdown in spending, and

anemic bank lending growth.

Monetary policy in some AEs

remains accommodative as

recovery remains fragile

In Q1 2016, the US Fed maintained the target range

for the federal funds rate at 0.25-0.50 percent. At

the same time, the Fed maintained its existing policy

of reinvesting principal payments from its holdings

of agency debt and agency mortgage-backed

securities and of rolling over maturing Treasury

securities at auction.46 Both the average US prime

rate and discount rate increased to 3.500 percent

and 1.000 percent from the quarter-ago average of

3.284 percent and 0.794 percent, respectively. In

addition, the US Fed funds rate increased to

0.369 percent from the 0.157 percent average

reported in the previous quarter.

46 Press Release. (n.d.). Retrieved from

https://www.federalreserve.gov/newsevents/press/monetary/20160316a.

htm

Meanwhile, the Monetary Policy Committee (MPC)

of the Bank of England (BOE) maintained its

monetary policy settings, keeping the official bank

rate paid on commercial banks’ reserves at

0.5 percent in Q4 2015. The MPC also decided to

maintain the stock of asset purchases financed by

the issuance of central bank reserves at

£375 billion.47

The Bank of Japan (BOJ), after shifting to

quantitative and qualitative monetary easing policy,

adopted monetary base control, which involved the

change in the main operating target for its money

market operations (MMO) from the uncollateralized

overnight call rate. Thus, for the review quarter, the

BOJ continued to conduct MMO to increase the

monetary base at about 80 trillion yen from 60-70

trillion yen yearly. In addition, the BOJ continued to

buy Japanese government bonds (JGBs) annually at

80 trillion yen from 50 trillion yen, exchange-traded

funds (ETFs) at 3 trillion yen from 1 trillion yen, and

Japan REITs at 90 billion yen from 30 billion yen. The

BOJ likewise maintained its purchases of commercial

papers and corporate bonds until their outstanding

amounts reach 2.2 trillion yen and 3.2 trillion yen,

respectively. Moreover, the BOJ decided to

introduce "Quantitative and Qualitative Monetary

Easing (QQE) with a Negative Interest Rate" in order

to achieve the inflation target of 2 percent. The BOJ

will apply a negative interest rate of -0.1 percent to

current accounts that financial institutions hold at

the Bank.48

Meanwhile, the Governing Council of the European

Central Bank decided to decrease the interest rates

on deposit facility, main refinancing operation, and

marginal lending facility by 10 bps, 5 bps, and 5 bps

to -0.40 percent, 0.0 percent, and 0.25 percent,

respectively. Moreover, the monthly purchases


http://www.bankofengland.co.uk/publications/Pages/news/2016/003.aspx 48The BOJ will adopt a three-tier system in which the outstanding balance of

each financial institution's current account at the Bank will be divided into

three tiers, to each of which a positive interest rate, a zero interest rate or a

negative interest rate will be applied, respectively.

Short-Term

US$14.3

billion

18.4%Medium-

and Long-

Term

US$63.3

billion

81.6%

TOTAL = US$77.6

billion


under the asset purchase programme were also

expanded to €80 billion from €60 billion.49

Lastly, the 90-day LIBOR and 90-day Singapore

Interbank Offered Rate (SIBOR) increased in Q1 2016

to 0.625 percent and 1.237 percent from 0.409

percent and 1.092 percent in Q4 2015, respectively,

even as global financial markets remained generally

liquid.

Chart 28. Selected Foreign Interest Rates

in percent

Global Economic Developments



In Q1 2016, global economic activity remained soft

for both advanced and developing economies.

Meanwhile, global labor market conditions generally

showed signs of improvement while inflation rates in

advanced and emerging economies were generally

mixed.

US real GDP expanded by 2.0 percent y-o-y in Q1

2016, unchanged from previous quarter’s growth.

The growth in real GDP was due to positive

contributions from consumer spending, and

residential fixed investment that were partly offset

by negative contributions from non-residential fixed

investment, private inventory investment, and

exports.50 Economic growth in Japan remained

stagnant at zero percent as private consumption and

capital expenditure remained soft.51


https://www.ecb.europa.eu/press/pr/date/2016/html/pr160310.en.html 50 US Bureau of Economic Analysis 51 Statistics Bureau of Japan

Economic activity in the Euro area grew by

1.5 percent in Q1 2016 slightly lower than the

1.6 percent growth registered in the previous

quarter as majority of Euro area economies

expanded except for Greece.52

Meanwhile, most emerging economies in Asia

recorded weaker output growth. South Korea’s

economy slowed down to 2.7 percent from the

previous quarter’s 3.1 percent as sluggish exports

continued to weigh on growth. The Singaporean

economy grew by only 1.8 percent in Q1 2016,

unchanged from the revised growth recorded a

quarter-ago, due to the weak performance of its

manufacturing sector.53 Economic activity in Hong

Kong likewise decelerated to 0.8 percent from

1.9 percent in the previous quarter as retail sales

and services weakened amid the deceleration in

tourist arrivals. The Chinese economy moderated to

6.7 percent in Q1 2016, slightly down from the

6.8 percent growth recorded in the previous quarter

due to the slowdown in the services sector.54 The

Indian economy expanded by 7.3 percent during the

review quarter, unchanged from the previous

quarter.55

In the ASEAN region, Philippines and Thailand posted

higher GDP growth rates during the review quarter.

The Philippine economy grew by 6.9 percent from

6.5 percent in the previous quarter due to robust

private consumption and investments.56 In Thailand,

GDP expanded by 3.2 percent during the review

quarter, as compared to the 2.8 percent expansion

in the previous quarter due to an increase in net

exports and accelerated government spending.57

Meanwhile other ASEAN economies registered a

sluggish growth in GDP. The Indonesian economy

slowed down to 4.9 percent in Q1 2016 from the

5.0 percent expansion reported in the previous

quarter as household consumption remained

subdued.58 In Vietnam, GDP decelerated to

52Eurostat 53 The Ministry of Trade and Industry, Singapore 54 National Bureau of Statistics of China 55 Indian Ministry of Statistics and Programme Implementation 56 Philippine Statistics Authority 57 National Economic and Social Development Board, Thailand 58 Statistics Indonesia


5.5 percent during the review quarter from

6.7 percent a quarter ago, driven mainly by the

decline in manufacturing and the prolonged drought

that led to the contraction in the agricultural sector.

The Malaysian economy expanded by 4.2 percent

during the review quarter, moderating from a

4.5-percent growth in the previous quarter due to

slower growth in the manufacturing and services

sectors.59

Chart 29. Real GDP

y-o-y growth, in percent

In terms of domestic prices of goods, average

inflation rates were mixed among major advanced

economies in Q1 2016. In the US, inflation rates

increased to 1.1 percent from 0.5 percent. In

contrast, inflation in Japan and Euro area decreased

to 0.1 percent and 0.0 percent from 0.3 percent and

0.1 percent, respectively.

Inflation rates in emerging Asian economies were

likewise mixed. Average inflation rates in Hong Kong

and China inched up to 2.8 percent, and 2.1 percent,

respectively, during the review quarter from 2.3

percent, and 1.5 percent in the previous quarter.

South Korea registered a slightly lower inflation rate

at 1.0 percent during the review quarter compared

to previous quarter’s 1.1 percent. In India, inflation

decelerated to 5.3 percent during the review

quarter from 5.5 percent in the previous quarter.

Meanwhile, inflation rate in Singapore was recorded

at -0.8 percent from -0.7 percent a quarter ago. In

ASEAN economies, average inflation rates in

Indonesia and Malaysia declined during the review

59 Bank Negara Malaysia

quarter, while inflation rates in the Philippines,

Thailand, and Vietnam picked up slightly.

Chart 30. Inflation

quarterly average, in percent

Global labor market conditions generally improved.

The unemployment rate in the US, Japan, and the

Euro area eased to 4.9 percent, 3.2 percent, and

10.3 percent during the review quarter from

5.0 percent, 3.3 percent, and 10.5 percent,

respectively, a quarter ago. In Asia, unemployment

rate in South Korea and Hong Kong increased to

3.8 percent and 3.4 percent from 3.5 percent and

3.3 percent, respectively, from quarter-ago levels.

Singapore’s unemployment rate inched up to

2.5 percent. China’s unemployment rate declined to

4.0 percent in Q1 2016 from 4.1 percent in the

previous quarter. Unemployment rates in ASEAN

countries also showed mixed trends increasing in the

Philippines (5.8 percent), Thailand (0.9 percent), and

Malaysia (3.4 percent), but decreased in Vietnam

(2.3 percent) during the review quarter.

Table 6. Macroeconomic Indicators in Selected

Economies in percent

Macroeconomic Indicators in Selected Economies, Q1 2016

(in percent)

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

G3

US 2.9 2.7 2.1 2.0 2.0 -0.1 0.2 0.1 0.5 1.1 5.6 5.4 5.2 5.0 4.9

Japan -0.9 0.7 1.8 0.9 0.0 2.3 0.5 0.1 0.3 0.1 3.5 3.4 3.4 3.3 3.2

Euro Area 1.3 1.6 1.6 1.6 1.5 -0.3 0.2 0.1 0.1 0.0 11.2 11.0 10.7 10.5 10.3

Emerging Asia

Hong Kong 2.4 2.9 2.2 1.9 0.8 4.4 3.0 2.3 2.3 2.8 3.3 3.2 3.3 3.3 3.4

South Korea 2.4 2.2 2.8 3.1 2.7 0.6 0.5 0.7 1.1 1.0 3.6 3.8 3.6 3.5 3.8

Singapore 2.7 1.7 1.8 1.8 1.8 -0.3 -0.4 -0.6 -0.7 -0.8 2.4 3.8 2.5 2.4 2.5

China 7.0 7.0 6.9 6.8 6.7 1.2 1.4 1.7 1.5 2.1 4.1 4.0 4.1 4.1 4.0

India 7.5 7.6 7.7 7.3 7.3 6.6 5.9 4.6 5.5 5.3 n.a. n.a. n.a. n.a. n.a.

ASEAN

Indonesia 4.7 4.7 4.7 5.0 4.9 6.5 7.1 7.1 4.8 4.3 n.a. n.a. n.a. n.a. n.a.

Malaysia 5.7 4.9 4.7 4.5 4.2 0.7 2.1 3.0 2.6 2.1 3.4 3.1 3.2 3.2 3.4

Philippines 5.0 5.9 6.2 6.5 6.9 2.4 1.7 0.6 1.0 1.1 6.6 6.4 6.5 5.6 5.8

Thailand 3.0 2.7 2.9 2.8 3.2 -0.5 -1.1 -1.1 -0.9 -0.5 1.0 0.9 0.9 0.8 0.9

Vietnam 6.0 6.3 6.5 6.7 5.5 0.7 1.0 0.5 0.3 1.3 2.2 2.4 2.4 2.4 2.3

Sources: Bloomberg, Country Websites

2/ Average inflation rate was around -0.03 percent for the second quarter of 2015

Unemployment rate1/

Country

Real GDP (y-o-y growth rate) Inflation (quarterly average)

1/ Unemployment rate is the proportion (in percent) of the total number of unemployed as a percentage of the labor force


Financial Condition of the BSP

Balance Sheet

Based on the preliminary and unaudited statement

of financial condition of the BSP as of end-March

2016, total assets reached P4,403.7 billion,

2.2 percent or P94.1 billion higher than the

quarter-ago level. Likewise, the aggregate level

surged by 6.5 percent or by P269.3 billion relative to

the end-March 2015 level. The BSP’s liabilities

increased by 2.2 percent or by P92.1 billion, q-o-q,

to P4,361.0 billion, and by 6.6 percent or

P268.5 billion relative to the end-March 2015 level.

As a result, the BSP’s net worth improved to

P42.6 billion compared to the quarter-ago level of

P40.8 billion. This amount was higher by 1.7 percent

or P0.7 billion than the P41.9 billion posted at

end-March 2015.

BSP’s net worth improves

The increase in the BSP’s assets was due largely to

the higher level of loans and advances to the NG,

which amounted to P163.5 billion in Q1 2016, an

increase of 91.2 percent or P78.0 billion from the

previous quarter’s P85.5 billion. The increase in

assets was also brought about by the higher level of

domestic securities, the expansion in international

reserves due to the rise in net foreign currency

deposit by the NG60 as well as income from

investments abroad, and revaluation adjustment on

the BSP’s foreign currency-denominated reserves.

Similarly, the BSP’s liabilities increased during the

review period due to higher placement of deposits in

60 Includes proceeds from NG issuance of ROP Global Bonds amounting to

US$495 million and from program loans extended by the Asian

Development Bank.

the BSP’s Special Deposit Accounts and Foreign

Financial Institutions Account. In the same way,

revaluation adjustment of international reserves

drove liabilities to increase by P22.3 billion from its

quarter-ago level.

Table 7. Balance Sheet of the BSP in billion pesos

2016t 2015

Mar Decp.u Mar

Assets

4,403.7

4,309.6

4,134.4

Liabilities

4,361.0

4,268.9

4,092.5

Net Worth

42.6

40.8

41.9 p.u Preliminary and unaudited based on core Financial Accounting

System (cFAS) Production Environment.

t Tentative and subject to change based on cFAS Development

Environment.

Note: Details may not add up to total due to rounding off

Income Statement

Based on preliminary and unaudited data, the BSP

registered a net income of P0.16 billion for Q1 2016

due mainly to gains in foreign exchange revaluation,

a turnaround from the P1.3 billion loss in Q4 2015.

BSP registers net income

Total revenues for Q1 2016 amounted to

P13.2 billion, lower than the P13.6 billion posted in

the previous quarter, as interest income from

domestic securities decreased by 15.2 percent from

the previous quarter’s level. Miscellaneous income,

likewise, fell by 49.5 percent or P1.2 billion, q-o-q.

Total expenditures amounted to P16.7 billion,

P2.3 billion lower than the level posted last quarter.

The q-o-q decrease in expenditures was due mainly

to reduced cost of minting/printing of currency,

interest expense on NG deposits and other deposits,

and other expenses.


Table 8. Income Position of the BSP for periods indicated

in billion pesos

Conclusion, Challenges and Future Policy Directions The Philippine economy continues to stand on solid

footing, supported by broadening growth drivers

and sustained benign inflation environment. Despite

the ongoing fragility in the global economy and

extreme weather conditions, robust domestic

demand buoyed economic expansion of 6.9 percent

in the first quarter of the year, exceeding market

expectations and moving within the government

target of 6.8-7.8 percent for 2016. While the

country’s progress toward a high growth trajectory

appears to be on track, several key developments

have emerged, posing potential risks and challenges

to the economic outlook.

Chief among these concerns is the subdued outlook

for the world economy. At the moment, the

consensus seems to be that global economic

conditions are likely to remain modest and uneven.

In its latest World Economic Outlook (WEO) in April

2016, the International Monetary Fund (IMF)

downgraded its growth projections anew for 2016 by

0.2 percentage point to 3.2 percent from 3.4 percent

in the January 2016 WEO update. The downward

revision largely reflects major macroeconomic

realignments including the slowdown and

rebalancing in China, lower commodity prices,

resulting slowdown in investment and trade, and

declining capital flows to emerging market and

developing economies. As a result, the pickup in

global activity is expected to be more gradual than

earlier projected in advanced economies as well as

emerging market and developing economies.61

In addition, further decline in the prices of oil and

other commodities will continue to feed into a

generally weak global economy. While oil-importing

emerging market economies are benefiting from

terms-of-trade gains, in some instances, they could

face tighter financing conditions and weakness in

external demand, which counter the positive terms-

of-trade impact on domestic demand and growth. In

its April 2016 issue of the Commodity Markets

Outlook (CMO), the World Bank expects all main

commodity indexes to decline in 2016 due to

persistently elevated supplies, and weak growth

prospects in emerging market and developing

economies, thereby affecting demand for industrial

commodities (e.g., energy, metals, and agricultural

raw materials).

Continued weakness in the global economic

environment, along with low oil prices, are seen to

impact on the country’s trade and remittance

channels. Nonetheless, exports are seen to register

positive growth this year, on account of steady albeit

moderate global demand, improvement in domestic

agricultural production as extreme weather

conditions are seen to normalize beginning the

second quarter of 2016, and expected gains from

61 IMF April 2016 WEO.

2016 2015

Q1 t Q1 Q4 p,u

Revenues 13.167 15.299 13.559

Less: Expenses 16.684 17.308 18.942

Net Income/(Loss) Before

Gain/(Loss) on FXR

Fluctuations and

Income Tax

-3.517 -2.009 -5.383

Expense/(Benefit)

Gain/(Loss) on Foreign

Exchange Rate Fluctuations 1

3.673 -1.176 3.897

Income Tax

Expense/(Benefit) 0.000 0.000 -0.183

Net Income/(Loss) After Tax 0.156 -3.185 -1.303

Note:

Details may not add up to total due to rounding off. p,u Preliminary and unaudited based on core Financial Accounting

System (cFAS) Production Environment. t Tentative and subject to change based on cFAS Development

Environment.


forging strategic multilateral and bilateral trade

agreements as well as further economic integration

within the ASEAN region. In addition, growth of

overseas Filipinos’ (OFs) remittances in 2016 is

projected to be at 4.0 percent, on the back of steady

deployment of OF workers and greater

diversification in terms of country-destinations.

The shift in the global growth dynamics is also

reflected in the risk sentiment of investors toward

emerging market economies (EMEs). Global market

sentiment remains fickle, resulting in volatility of

capital flows which in turn presents challenges to

macroeconomic management. Heightened risk

aversion and deteriorating market confidence could

cause investors to pull back from EM assets in favor

of safe haven assets.

Nonetheless, the US Fed is seen to be taking a less

aggressive stance in the pace of its tightening

compared to the more aggressive tone in December

2015, with the median forecast falling from four

expected rate hikes this year to two. This could

lessen the pressure of more stringent external

financing conditions as retrenchments of emerging

market portfolio inflows could ease off. Likewise, the

continued accommodative monetary policy stance

and low interest rate environment in the euro area

and Japan could drive some capital to flow to EMEs,

particularly those who exhibit solid macroeconomic

fundamentals such as the Philippines.

The Philippines also has its own idiosyncratic

challenges to domestic demand. Among others, the

impact of El Niño and other weather disturbances

present upside risk to inflation and downside risks to

growth in the near term. Moreover, one of the

urgent areas crucial to increasing national

productivity and overall potential growth is to

address infrastructure bottlenecks, while improving

the quality of existing road and transportation

networks. This will enhance connectivity and

mobility of goods and services and maximize the

potential of growth areas outside Metro Manila.

On the inflation outlook, baseline forecasts suggest

that the current inflation environment is expected to

begin to move back to target range of 2.0 to

4.0 percent during the second half of 2016, with

inflation expectations remaining well anchored to

the target. Lending support to this are the impact of

election spending, assumed increase in

non-agriculture minimum wage in July 2016, positive

base effects, as well as oil price futures showing an

uptrend, albeit on a gradual path. However, the

overall risks surrounding the inflation outlook are

slightly to the downside. This could come from

slower global economic activity and further decline

in oil prices. Meanwhile, pending petitions for

adjustments in electricity rates and the impact on

food and utility prices of stronger-than-expected El

Niño conditions pose upside risks to inflation.

Amid the tough headwinds, the government is well-

equipped to sustain the economic growth

momentum over the medium term. Enthused by the

country’s sustained strong economic performance,

the government remains committed to pursue its

macroeconomic targets and growth objectives over

the medium-term. Even with the change in political

leadership, the Philippine economy is poised to

continue its promising growth story and ride out the

external and domestic challenges on the back of

domestic sources of growth, structural and policy

reforms in place, and ample fiscal and monetary

policy space.

The synchronization of fiscal and monetary policies

to ensure a macroeconomic environment that will

support consumer confidence and investment

spending would be necessary to mitigate the impact

of weak external demand. The NG’s fiscal

consolidation efforts have been on track and have

created fiscal space to accelerate infrastructure

spending and to provide much-needed public

investments to stimulate economic growth.

Meanwhile, there remains sufficient monetary policy

space to guard against potential risks.

Going forward, the BSP will continue to keep a

watchful eye over how domestic and external


developments will evolve to ensure that an enabling

monetary and financial environment is maintained

to achieve the country’s growth objectives, while

safeguarding price and financial stability.

By June 2016, the BSP will transition to an Interest

Rate Corridor (IRC) system to enhance its ability to

better influence short-term market interest rates to

move closely with the BSP policy rate. The

operational shift is aimed at strengthening the

transmission of changes in the monetary policy

stance to the rest of the economy, and enabling the

BSP to better manage inflation and promote long-

term sustainable growth. Over time, the IRC system

is also expected to further develop the domestic

capital market by increasing money market

transactions, and bolstering active liquidity

management and monitoring programs by banks.

In response to uncertainties in the global financial

market, the BSP will be able to help mitigate the

adverse impact of capital outflows on the domestic

economy by ensuring adequate level of liquidity in

the economy and the financial markets during

periods of heightened uncertainty and increased risk

aversion. While guarding against speculative flows

that could contribute to the peso’s volatility and

undermine the inflation target, the BSP will continue

to maintain a market-determined exchange rate and

a comfortable level of international reserves as

safeguard against external shocks.

The sound and stable condition of the Philippine

banking system has been one of the anchors of the

sustained robust performance of the domestic

economy. The state of the country’s financial

system, at present, is grounded on the structural and

regulatory reforms pursued by the BSP over the

years. This reform momentum will be further

sustained with a view to toughen its resilience

against shocks as well as to boost its role as a

catalyst for durable long-term economic growth. To

this end, the BSP will continue to ensure that a

sound regulatory framework, that would allow

Philippine banks to cope with challenges related to

global financial volatilities, is in place.

The BSP will also continue to pursue reforms

promoting effective risk management, a stronger

capital base and improved corporate governance

standards, which are essential ingredients to

ensuring stability in the financial system. The BSP

will continue to craft banking regulations that are

responsive, consistent with best practices and in line

with the international financial architecture reform

agenda.

In addition, the BSP will continue to actively pursue

initiatives to promote a deeper domestic capital

market that will complement the presence of a

resilient banking system. The policy thrust is to focus

on enhancing further the infrastructure and the

regulatory framework for capital market

transactions to promote efficiency in trading,

settlement and delivery of securities. At the same

time, the BSP will continue to adopt policies and

programs that would help develop a sound,

responsive, and inclusive financial system that will

broaden the access of the underserved and the

unbanked segments of our population to the

financial sector. Among the key strategies in the

BSP’s financial inclusion agenda are putting in place

banking regulations that leverage on technology to

increase access to financial products; strengthening

financial consumer protection; and raising financial

education and awareness to new financial products

and modes of delivery. The BSP will likewise remain

proactive in ensuring the credibility and promoting a

safe, sound and efficient payments and settlements

system with the continued enhancement of its

processes and provision of necessary infrastructure

through the operation of the Philippines’ real time

gross settlement system or the PhilPaSS.

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.

Annexes

A Circular on Public and/or Publicly-Guaranteed Foreign Loan Agreement and Other Agreements

which Give Rise to a Foreign/Foreign Currency Obligation of the Public Sector

B Providing flexibility in raising foreign capital and encouraging more foreign investors to invest in

the country

Annex A

Circular on Public and/or Publicly-Guaranteed Foreign Loan Agreement and Other Agreements which Give

Rise to a Foreign/Foreign Currency Obligation of the Public Sector

The BSP issued the amendment or revision to Circular No. 381 dated 14 July 1978 as follows:

Effective immediately, no public and/or publicly guaranteed foreign loan, deferred payment or any other

agreements which give rise to a foreign/foreign currency obligation or liability of the public sector (whether

primarily or subsidiarily), including promissory notes or guarantees issued in connection therewith submitted

to the BSP for approval and/or registration under the provisions of pertinent laws, circulars, rules and

regulations shall be approved and/or registered if the covering agreements/documents are notarized or

otherwise evidenced by a public instrument. (BSP Circular No. 909 dated 30 March 2016)

Circular on Public and/or Publicly-Guaranteed Foreign Loan Agreement and Other Agreements which Give

Rise to a Foreign/Foreign Currency Obligation of the Public Sector

The BSP issued the amendment or revision to Circular No. 381 dated 14 July 1978 as follows:

Effective immediately, no public and/or publicly guaranteed foreign loan, deferred payment or any other

agreements which give rise to a foreign/foreign currency obligation or liability of the public sector (whether

primarily or subsidiarily), including promissory notes or guarantees issued in connection therewith submitted

to the BSP for approval and/or registration under the provisions of pertinent laws, circulars, rules and

regulations shall be approved and/or registered if the covering agreements/documents are notarized or

otherwise evidenced by a public instrument. (BSP Circular No. 909 dated 30 March 2016)

Agricultural Value Chain Financing Framework

The agriculture and fisheries sectors have traditionally been significant contributors in the Philippine economy,

accounting for 10 percent of the country’s Gross Domestic Product and employing 11.2 million Filipinos in

2014. Despite the important impact of these sectors, obtaining credit remains a challenge. Lack of access to

finance by smallholder farmers put them in a bigger disadvantage making them unable to integrate to higher

value markets. In general, the sector is considered a high risk market due to its inherent susceptibility to

weather conditions, flooding, pest infestations, and man-made calamities, among others.

The new issuance by the BSP on agricultural value chain financing addresses the associated credit risks with

the agriculture and fisheries sector by shifting the focus of lending from individual farmers and fisher folks to

the whole value chain. A value chain is defined as a set of actors, suppliers, processors, and aggregators who

conduct linked sequence of value-adding activities involved in bringing a product from its raw material stage to

the consumers.

The framework provides minimum prudential expectations including the need for adequate policies and

procedures on the analysis of the value chain, availability of appropriate products, utilization of innovative

disbursement schemes, and adoption of anchor-firm triggered loan release. The issuance also allows financial

institutions to put in place a disaster contingency mechanism requiring the adoption of risk mitigants to

minimize losses and provide relief to a borrower to facilitate recovery.

To encourage engagement in the lending scheme, incentives are also provided to financial institutions that

comply with the regulatory expectations. The incentives include compliance with agri-agra requirement and

an additional 25 percent increase in the single borrower’s limit for loans granted to participants in the

agricultural value chains for a period of three years.

Annex A

The BSP hopes that the issuance will provide the necessary guidance for banks to be able to serve the needs of

the agriculture and fisheries sector, specifically the smallholders, in a manner that is viable and sustainable.

(BSP Circular No. 908 dated 14 March 2016)

Amendment to Unit Investment Trust Fund (UITF) Regulations

The BSP under BSP Circular No. 907 issued a revision to subsections X410.8/4410Q.8 of MORB and MORNBFI

to amend the section pertaining to feeder fund/fund-of-funds as follows:

In the case of feeder fund/fund-of-funds, the exposure limit shall be applied on the target fund’s underlying

investments. Notwithstanding said limit, if the target fund is allowed by its respective regulatory authority to

invest in units/shares of other open-ended CIS, the exposure limit prescribed by said regulatory authority shall

instead apply. Furthermore, the investments in any one target fund shall not exceed ten percent (10%) of the

total net asset value of the target fund.

(BSP Circular No. 907 dated 10 March 2016)

Implementation of Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio and Disclosure

Standards

The BSP issued the Liquidity Coverage Ratio (LCR) framework aimed at strengthening the liquidity position of

universal and commercial banks (U/KBs). This is part of the Basel 3 reform package issued by the Basel

Committee on Banking Supervision (BCBS).

Under the new rule, U/KBs, including foreign bank branches, shall hold sufficient High Quality Liquid Assets

(HQLAs) that can be easily converted into cash to service liquidity requirements over a 30-day stress

period. This provides banks with a minimum liquidity buffer to be able to take corrective action to address a

liquidity stress event.

The LCR is one of the components of the new liquidity standard under Basel 3. The other is the Net Stable

Funding Ratio (NSFR) which looks at the liquidity requirements of banks over a longer period of one year. This

is being finalized and the BSP said that the exposure draft may be issued within the year.

The LCR should be seen as complementing the minimum Capital Adequacy rules. While the latter safeguards

the industry over solvency risks, the LCR imposes a minimum standard to protect banks against liquidity risks

which may happen even if a bank is still solvent.

The approval of the Monetary Board provides for an observation period from 01 July this year to end-2017,

during which banks will start reporting their LCR to the BSP. The observation period provides the banks with

adequate transition to the new prudential standard.

Beginning 01 January 2018, the LCR threshold that banks will be required to meet will be 90 percent which will

then be increased to 100 percent beginning 01 January 2019. (BSP Circular No. 905 dated 10 March 2016)

Phased Lifting of the Moratorium on the Grant of New Banking License or Establishment of New Domestic

Banks

The BSP approved the phased lifting of the moratorium on the grant of new banking license or establishment

of new domestic banks to promote competitive banking environment while preserving its basic thrust of

encouraging mergers and consolidations

Thus, the suspension of the grant of new banking licenses or the establishment of new banks under Subsection

x102.2 of the MORB has been lifted under a two-phased approach. Under phase 1of the liberalization. The

grant of new universal/commercial banking license shall be allowed in connection with the upgrading of an

existing domestic thrift bank. Under Phase 2, the moratorium on the establishment of new domestic banks

shall be fully lifted and locational restriction shall be fully liberalized starting 1 January 2018.

Annex A

The establishment of banks in the cities or municipalities where there are no banking offices as well as the

establishment of microfinance-oriented thrift and rural banks shall continue to be allowed as governed by

existing regulations.

A new banking organization must have suitable/fit shareholders, adequate financial strength, a legal structure

in line with its operational structure, a management with sufficient expertise and integrity to operate the bank

in a sound and prudent manner. (BSP Circular No. 902 dated 15 February 2016)

Amendment to Sec. X151 of the MORB on the Activities and Services Allowable for Micro-Banking Offices

The BSP recently approved a measure that further promotes financial inclusion by expanding the scope of

allowable activities in micro-banking offices (MBOs).

MBOs are scaled-down offices which provide a specified range of banking activities and services such as

acceptance of micro-deposits, disbursement of micro-loans, selling of microinsurance, purchase of foreign

currency, bills payments, government pay-outs, and e-money conversion. Prior to the recently approved

measure, MBOs could perform the customer identification process and facilitate account activation but the

approval and actual opening of the deposit account shall be done only at the head office or branch. Clients

who want to transact in MBOs would therefore still need to go to a head office or branch to open a deposit

account. This practice did not fully capture the potential of MBOs as a banking presence in remote and rural

areas where travelling to a bank branch may be prohibitive in terms of cost.

The new issuance by the BSP enables MBOs to complete the process of account opening from application up

to the acceptance of initial deposit provided that the necessary controls are in place.

The MBO policy is one of the initiatives of the BSP to extend the physical reach of financial services. As of June

2015, there were 531 MBOs present in 337 municipalities, of which 64 municipalities are being served by

MBOs alone. Increasingly, areas that were unbanked before now enjoy banking presence due to MBOs. In

2014, for example, 11 out of 19 previously unbanked municipalities gained banking presence as a result of

MBO establishment, while the remaining 8 municipalities became banked because of regular OBOs.

Banks have also taken advantage of the opportunities presented by the MBO policy. The number of banks with

MBOs increased to 35 banks in 2014 from just 5 banks in 2011, a year after the release of the MBO regulation.

Because of MBOs, these banks are able to expand outreach at lower costs. Some estimates indicate that

monthly operating expenses are 7 to 8 times lower in MBOs as compared to a bank branch.

The recent policy issuance is also expected to further promote savings mobilization through micro-deposits

collected in MBOs. Micro-deposits, which are basic savings accounts especially designed for low income

earners, have maintaining balance less than P100 and have no dormancy charges. As of June 2015, there are

2.3 million micro-deposit accounts amounting to P4.6 billion. (BSP Circular No. 901 dated 29 January 2016)

Guidelines on Operational Risk Management and Amendments to the Outsourcing Framework

The BSP Monetary Board (MB) recently approved the guidelines on operational risk management (ORM) as

part of the continuing initiatives of the BSP to strengthen the risk management systems of its supervised

financial institutions (BSFIs) and promote their sustained safe and sound operations.

Operational risk is among the top risk exposures of BSFIs, which cuts across all activities, products, and

services, and may even come in tandem with the other types of risks, e.g., credit, liquidity, and market. It may

result from weak controls, inadequate policies on acceptable behavior and practices, poor working

environment, weak sales and marketing practices, system failures, or natural or man-induced disasters, among

others. Although operational risk is inherent in all areas of operations, it is more often managed on a

fragmented basis, which tends to discount its overall impact on BSFIs’ operations. In this regard, the risk of

loss arising from operational risk events may also be potentially underestimated.

Annex A

The BSP expects BSFIs to be sensitive to sources of operational risk and to adopt a holistic framework that

would facilitate identification, assessment, monitoring, and management of said type of risk as part of the

enterprise-wide risk management system. The MB-approved ORM guidelines highlight that each personnel

has a responsibility in the effective implementation of the ORM framework. It is therefore critical to have

personnel who are competent to carry-out their respective duties and responsibilities, and possess a high

degree of integrity.

In this view, the board of directors should adopt policies in the areas of recruitment and selection,

performance management, training and development, remuneration and compensation, and succession

planning to promote a culture of high standards of ethical behavior and consistency of performance in the

organization. Said policies should require continuing assessment of the fitness and propriety of personnel,

with the results of said assessment considered in the development of individual training and development

program.

The ORM guidelines also emphasize the three lines of defense principle in managing operational risk. Business

line management and personnel, as the first line of defense, are expected to ensure that policies and

processes in their respective areas of responsibilities are consistent with the organization’s overall ORM

framework. The operational risk management function (ORMF), as part of the second line of defense, is

expected to recommend to the board of directors appropriate policies and procedures relating to operational

risk management and controls, as well as design and implement the operational risk assessment methodology,

tools, and risk reporting systems. The compliance function, on the other hand, is expected, among others, to

determine inappropriate conduct/behavior of personnel, officers, and the board, that may lead to fraud or any

form of business disruption. The internal audit function, as the third line of defense, should conduct an

independent assessment of the ORM framework including the implementation of the operational risk

management policies and procedures.

Guidance in managing operational risk related to prudential reporting is likewise covered in the guidelines. In

particular, BSFIs are expected to adopt a framework that ensures the integrity of information submitted to the

BSP and compliance with the standards prescribed on acceptable reporting quality. The ORM guidelines warn

that persistent concerns on the integrity and accuracy of prudential reports, including failure to comply with

the directives of the BSP, may be considered as unsafe or unsound practice.

In line with the approval of ORM guidelines, the BSP MB, also approved the amendments to the outsourcing

framework to set-out an overarching governance framework, and align expectations on outsourcing activities

with the ORM principles. (BSP Circular No. 899 dated 18 January 2016 and BSP Circular No. 900 dated

18 January 2016)

Amendments to the cooling-off provisions of the BSP Regulations on Financial Consumer Protection

The BSP issued an advisory to public on their right to “cooling-off” as part of the fair treatment standards of

the BSP Financial Consumer Protection (FCP) Regulations.

“Cooling-off” is the right of the BSP-supervised financial institution (BSFI) client to cancel his contract without

penalty. BSFIs should give their clients at least two (2) banking days from the signing of the contract to

cancel.

This right to cooling-off is one of the key requirements of the new BSP Financial Consumer Protection

Regulation that seeks to empower clients by giving them the opportunity to reconsider long-term investment

decisions.

Cooling-off is applicable only to individuals and not corporations, partnerships and associations. This right shall

cover investment in long-term financial instruments with a remaining term of at least one year. Examples are

government securities, corporate bonds and Long Term Negotiable Certificate of Deposit (LTNCD).

Annex A

To avail, the client should notify the BSFI in writing about his intention to terminate the agreement within the

cooling-off period. The client shall shoulder only reasonable amount of processing or administrative fees plus

any mark to market costs from the signing of the contract up to its cancellation. BSFIs should disclose these

costs, including the benchmark from which market value of the financial instrument will be determined, prior

to the signing of the agreement or in the agreement. (BSP Circular No. 898 dated 14 January 2016)

Annex B

Providing flexibility in raising foreign capital and encouraging more foreign investors to invest in the country

• In February, the BSP further liberalized rules governing foreign exchange (FX) transactions in the

Philippines. The policy amendments are as follows:

� Prior BSP approval is no longer required for the borrowings from offshore sources/FCDUs of

banks of the following resident entities.

� Purely private sector loans (without a guarantee from the public sector or banks) for

the financing of energy and power infrastructure projects.

� Private nonbank financial institutions engaged in microfinance activities where

proceeds from the loans are to be used for microfinance lending.

� Conversion to FX of pesos arising from disapproved subscriptions of non-resident investors

to stock rights offering of companies listed at the Philippine Stock Exchange is now allowed.

• In March, the Philippine Stock Exchange (PSE) asked comments and suggestions from stakeholders on

its draft Rules on Dollar Denominated Securities (DDS). The new securities product is intended for

companies interested in listing dollar denominated shares in addition to their peso common shares.

The proposed rules cover the listing and disclosure, trading, clearing and settlement, and fees of DDS.

Under the proposed rules, companies who are already listed at the Exchange can issue a new set of

securities, either common or preferred shares, which are quoted, traded, and settled in US dollars.

This will provide more products and services for the market and will allow companies flexibility in

raising capital in dollars.1

1 Source: Philippine Stock Exchange, Press Release, March 2016.

Statistical Tables

List of Tables

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 Metro Manila

4b Consumer Price Index in Areas Outside Metro Manila

5 Monetary Indicators

6 Selected Domestic Interest Rates

7 Number of Financial Institutions

8 Total Resources of the Philippine Financial System

9 Non-Performing Loans (NPL), Total Loans and Loan Loss Provisions of the Banking

System

Ratio of Non-Performing Loans (NPL) and Loan Loss Provisions to Total loans of the

Banking System

10 Stock Market Transactions

11 Philippines Balance of Payments

12 International Reserves

13 Exchange Rates of the Peso (pesos per unit of foreign currency)

13a Exchange Rates of the Peso (units 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 Position of the 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

2016 2016 2016

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Agriculture, Hunting, Forestry and Fishing 179,664 166,993 155,801 216,321 181,414 166,891 155,657 215,786 173,493 0.9 3.3 -2.3 4.1 1.0 -0.1 -0.1 -0.2 -4.4 0.1 0.3 -0.2 0.5 0.1 0.0 0.0 0.0 -0.4

Industry 561,261 614,518 558,090 657,319 590,832 652,185 592,408 700,372 642,512 4.8 9.0 7.8 9.2 5.3 6.1 6.1 6.5 8.7 1.6 3.0 2.5 3.0 1.8 2.1 2.0 2.2 2.9

Mining and Quarrying 21,674 30,307 16,368 13,346 21,135 27,706 16,449 15,209 23,531 17.4 10.8 12.7 6.3 -2.5 -8.6 0.5 14.0 11.3 0.2 0.2 0.1 0.0 0.0 -0.1 0.0 0.1 0.1

Manufacturing 400,802 414,742 378,608 472,363 424,988 434,160 400,662 501,178 459,226 7.0 11.1 7.5 7.7 6.0 4.7 5.8 6.1 8.1 1.6 2.4 1.6 1.9 1.4 1.1 1.3 1.5 1.9

Construction 87,323 108,954 98,541 114,460 90,695 127,003 106,211 123,851 100,498 -4.2 3.9 12.0 17.1 3.9 16.6 7.8 8.2 10.8 -0.2 0.2 0.6 0.9 0.2 1.0 0.4 0.5 0.6

Electricity, Gas and Water Supply 51,462 60,515 64,573 57,150 54,013 63,316 69,086 60,133 59,257 0.5 4.2 2.4 7.4 5.0 4.6 7.0 5.2 9.7 0.0 0.1 0.1 0.2 0.2 0.2 0.3 0.2 0.3

Services 942,065 1,053,313 1,002,988 1,062,081 994,112 1,124,152 1,075,033 1,144,929 1,072,535 7.1 6.1 5.8 5.7 5.5 6.7 7.2 7.8 7.9 3.9 3.5 3.4 3.1 3.1 3.9 4.2 4.3 4.4

Transportation, Storage and

Communication 130,050 144,019 119,066 144,909 140,956 153,595 128,651 158,088 148,612 8.2 6.8 5.3 5.5 8.4 6.6 8.0 9.1 5.4 0.6 0.5 0.4 0.4 0.6 0.5 0.6 0.7 0.4

Trade and Repair of Motor Vehicles,

Motorcycles, Personal & Household Goods 255,154 288,374 312,034 330,248 270,314 307,620 338,276 354,316 291,890 6.3 6.7 7.0 3.4 5.9 6.7 8.4 7.3 8.0 0.9 1.1 1.3 0.6 0.9 1.0 1.5 1.2 1.2

Financial Intermediation 125,519 136,690 124,033 129,243 130,949 144,619 130,698 140,448 142,870 5.7 6.1 8.4 8.9 4.3 5.8 5.4 8.7 9.1 0.4 0.5 0.6 0.6 0.3 0.4 0.4 0.6 0.7

R. Estate, Renting and Business Activities 182,283 209,789 206,129 205,104 193,992 224,220 222,210 221,070 211,503 10.1 8.5 6.7 9.7 6.4 6.9 7.8 7.8 9.0 1.1 1.0 0.8 1.0 0.7 0.8 0.9 0.8 1.0

Public Administration & Defense;

Compulsory Social Security 68,920 83,358 71,171 70,212 66,134 82,685 72,967 75,297 70,600 6.9 1.8 -2.4 11.5 -4.0 -0.8 2.5 7.2 6.8 0.3 0.1 -0.1 0.4 -0.2 0.0 0.1 0.3 0.3

Other Services 180,140 191,084 170,554 182,366 191,768 211,414 182,231 195,709 207,060 5.5 4.3 5.0 1.5 6.5 10.6 6.8 7.3 8.0 0.6 0.5 0.5 0.1 0.7 1.1 0.7 0.7 0.9

Gross Domestic Product 1,682,990 1,834,824 1,716,879 1,935,722 1,766,358 1,943,228 1,823,097 2,061,086 1,888,540 5.6 6.8 5.7 6.7 5.0 5.9 6.2 6.5 6.9 5.6 6.8 5.7 6.7 5.0 5.9 6.2 6.5 6.9

Net Primary Income 370,692 362,940 355,845 373,270 372,543 372,131 380,082 416,155 412,326 11.0 9.0 -2.6 1.1 0.5 2.5 6.8 11.5 10.7

Gross National Income 2,053,682 2,197,764 2,072,724 2,308,992 2,138,900 2,315,359 2,203,179 2,477,241 2,300,866 6.6 7.2 4.1 5.7 4.1 5.4 6.3 7.3 7.6

Source : Philippine Statistics Authority (PSA)

Annual Change (%) Contribution to GDP Growth (percentage points)Levels

2015 2015 20152014

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.Total may not add up due to rounding.

2014 2014

1a GROSS NATIONAL INCOME AND GROSS DOMESTIC PRODUCT BY EXPENDITURE SHARES


in million pesos, at constant 2000 prices

2016 2016 2016

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Household Final Consumption Expenditure 1,161,170 1,213,139 1,170,933 1,406,949 1,231,928 1,291,318 1,241,881 1,499,010 1,318,346 6.3 5.7 4.9 5.3 6.1 6.4 6.1 6.5 7.0 4.3 3.8 3.3 3.9 4.2 4.3 4.1 4.8 4.9

Government Final Consumption Expenditure 185,112 219,474 168,867 155,300 185,519 224,704 195,352 179,771 203,954 3.4 1.5 -1.1 11.0 0.2 2.4 15.7 15.8 9.9 0.4 0.2 -0.1 0.9 0.0 0.3 1.5 1.3 1.0

Capital Formation 370,434 330,962 383,065 483,902 416,596 401,895 438,731 548,058 515,703 8.6 7.7 -0.2 5.7 12.5 21.4 14.5 13.3 23.8 1.9 1.4 -0.1 1.4 2.7 3.9 3.2 3.3 5.6

Fixed Capital 372,973 358,500 376,298 417,835 405,710 404,105 428,624 518,857 509,481 0.2 5.5 11.2 8.0 8.8 12.7 13.9 24.2 25.6 0.0 1.1 2.3 1.7 1.9 2.5 3.0 5.2 5.9

Construction 135,039 163,895 152,551 180,735 141,104 187,392 165,467 194,530 158,024 -5.5 7.2 12.8 19.0 4.5 14.3 8.5 7.6 12.0 -0.5 0.6 1.1 1.6 0.4 1.3 0.8 0.7 1.0

Durable Equipment 202,002 162,741 191,782 193,178 227,095 185,158 226,602 274,349 310,106 4.5 3.6 9.9 0.1 12.4 13.8 18.2 42.0 36.6 0.5 0.3 1.1 0.0 1.5 1.2 2.0 4.2 4.7

Breeding Stock & Orchard Dev't 26,106 22,467 18,336 30,386 26,126 22,987 18,997 31,176 27,199 -4.4 -2.0 -1.6 2.3 0.1 2.3 3.6 2.6 4.1 -0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1

Intellectual Property Products 9,827 9,398 13,629 13,536 11,385 8,568 17,557 18,802 14,151 14.6 37.5 37.1 8.5 15.9 -8.8 28.8 38.9 24.3 0.1 0.1 0.2 0.1 0.1 0.0 0.2 0.3 0.2

Changes in Inventories -2,539 -27,538 6,767 66,067 10,887 -2,209 10,106 29,201 6,222 91.9 14.7 -85.2 -6.8 528.8 92.0 49.3 -55.8 -42.8 1.8 0.3 -2.4 -0.3 0.8 1.4 0.2 -1.9 -0.3

Exports 812,350 896,065 941,728 727,843 898,070 941,672 1,034,252 807,172 957,356 13.4 9.0 11.9 13.0 10.6 5.1 9.8 10.9 6.6 6.0 4.3 6.1 4.6 5.1 2.5 5.4 4.1 3.4

Less: Imports 858,943 807,366 938,428 852,141 963,339 909,069 1,090,388 979,368 1,119,583 17.9 5.6 4.8 10.1 12.2 12.6 16.2 14.9 16.2 8.2 2.5 2.7 4.3 6.2 5.5 8.9 6.6 8.8

Statistical Discrepancy 12,867 -17,450 -9,287 13,869 -2,417 -7,293 3,269 6,442 12,764 280.6 -65.5 -240.0 25.7 -118.8 58.2 135.2 -53.6 628.0 1.3 -0.4 -1.0 0.2 -0.9 0.6 0.7 -0.4 0.9

Gross Domestic Product 1,682,990 1,834,824 1,716,879 1,935,722 1,766,358 1,943,228 1,823,097 2,061,086 1,888,540 5.6 6.8 5.7 6.7 5.0 5.9 6.2 6.5 6.9 5.6 6.8 5.7 6.7 5.0 5.9 6.2 6.5 6.9

Net Primary Income 370,692 362,940 355,845 373,270 372,543 372,131 380,082 416,155 412,326 11.0 9.0 -2.6 1.1 0.5 2.5 6.8 11.5 10.7

Gross National Income 2,053,682 2,197,764 2,072,724 2,308,992 2,138,900 2,315,359 2,203,179 2,477,241 2,300,866 6.6 7.2 4.1 5.7 4.1 5.4 6.3 7.3 7.6

Source : Philippine Statistics Authority (PSA)

20152014 2014

Levels Annual Change (%) Contribution to GDP Growth (percentage points)

20152015

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. Total may not add up due to rounding.

2014

2 SELECTED LABOR, EMPLOYMENT AND WAGE INDICATORS

w/ Region VIII w/o Region VIII w/o Leyte4 w/ Leyte w/o Leyte w/ Region VIII w/o Region VIII w/ Leyte w/o Leyte w/ Leyte w/o Leyte w/ Leyte w/o Leyte w/ Region VIIIw/o Region VIII w/o Leyte w/ Leyte w/o Leyte w/ Leyte w/o Leyte w/ Leyte w/o Leyte w/ Leyte w/o Leyte

Employment Status 1

Labor Force (in thousands) 40,050 41,379 41,343 39,387 41,588 41,231 41,319 40,090 41,164 41,840 41,898 41,024 42,151 41,345 42,515 41,637

Employed 37,310 38,651 38,741 36,418 38,664 38,453 38,837 37,455 38,461 39,158 39,174 38,344 39,779 39,000 40,047 39,213

Employment Created 1,024 281 1,653 1,063 1,044 1,037 494 (109) 163 752

Unemployed 2,740 2,728 2,602 2,969 2,924 2,778 2,482 2,635 2,703 2,681 2,724 2,680 2,372 2,345 2,469 2,424

Underemployed 6,870 7,118 7,180 7,103 7,027 7,049 7,278 6,548 6,883 6,983 8,219 7,989 7,021 6,866 7,879 7,716

Labor Force Participation Rate (%) 64.4 64.6 63.7 63.8 65.2 64.4 64.3 63.8 63.7 64.6 62.9 63.0 63.3 63.4 63.3 63.4

Employment Rate (%) 93.2 93.4 93.7 92.5 93.0 93.3 94.0 93.4 93.4 93.6 93.5 93.5 94.4 94.3 94.2 94.2

Unemployment Rate (%) 6.8 6.6 6.3 7.5 7.0 6.7 6.0 6.6 6.6 6.4 6.5 6.5 5.6 5.7 5.8 5.8

Underemployment Rate (%) 18.4 18.4 18.5 19.5 18.2 18.3 18.7 17.5 17.9 17.8 21.0 20.8 17.7 17.6 19.7 19.7

Labor Turnover Rate (%) 1.2 0.6 0.9 2.4 1.0 0.5 1.2 3.2

Overseas Employment (Deployed, in thousands) 1,645 513 468 439 225

Land-based 1,292 413 377 349 152

Sea-based 354 99 91 90 73

Strikes

Number of New Strikes 2 5 0 0 0 2 0 3 1 1

Number of Workers Involved 51 730 0 0 0 51 0 450 200 80

Nominal Daily Wage Rates (in pesos)2

Non-Agricultural

NCR 466.0 481.0 466.0 466.0 466.0 466.0 466.0 481.04

481.0 481.0 481.0

Regions Outside NCR 362.5 362.5 349.5 362.5 362.5 362.5 362.5 362.54

362.5 362.5 362.5

Agricultural

NCR

Plantation 429.0 444.0 429.0 429.0 429.0 429.0 429.0 444.04

444.0 444.0 444.0

Non-Plantation 429.0 444.0 429.0 429.0 429.0 429.0 429.0 444.04

444.0 444.0 444.0

Regions Outside NCR

Plantation 337.5 337.5 324.5 337.5 337.5 337.5 337.5 337.54

337.5 337.5 337.5

Non-Plantation 322.0 335.0 322.0 322.0 322.0 322.0 322.0 322.04

322.0 335.0 335.0

Real Daily Wage Rates (in pesos), 2006=100 3

Non-Agricultural

NCR 356.5 363.8 361.0 356.5 354.6 356.5 354.1 365.84

365.8 363.8 364.7

Regions Outside NCR 260.2 257.8 255.9 261.7 259.3 260.2 259.3 260.04

260.6 257.8 259.1

Agricultural

NCR

Plantation 328.2 335.9 332.3 328.2 326.5 328.2 326.0 337.64

337.6 335.9 336.6

Non-Plantation 328.2 335.9 332.3 328.2 326.5 328.2 326.0 337.64

337.6 335.9 336.6

Regions Outside NCR

Plantation 242.3 240.0 237.6 243.7 241.4 242.3 241.4 242.14

242.6 240.0 241.2

Non-Plantation 224.7 229.5 230.3 226.9 225.0 224.7 224.4 223.34

223.0 229.5 228.5

Notes:1

2

3

4Annual 2014 data refer to the average estimates for April, July and October survey rounds only excluding data of the province of Leyte.

PPreliminary

Sources: Philippine Overseas Employment Administration (POEA), National Wages and Productivity Commission (NWPC), and National Conciliation and Mediation Board (NCMB) and Philippine Statistics Authority (PSA)

Source of data for both nominal and real wage rates is the National Wages and Productivity Commission. Includes basic minimum wage and cost of living allowance (COLA). Starting 2006, annual average/total is as of December.

Starting 10 November 1990, adjustments in the minimum legislated wage rates are being determined by the Regional Tripartite Wages Productiviity Board. Starting 2010, real terms is computed using 2006 as base year.

Q3 Q4

Starting with January 2007 LFS round, the population projection based on the 2000 Census of Population was adopted to generate the labor force statistics per NSCB Resolution No. 1 Series of 2005.

Q2 Q3Q1Q1 Q4 Q1Q2

2016p

2015p

20142014

Ave/Total

2015

Ave/Total

3 CASH OPERATIONS OF THE NATIONAL GOVERNMENT


in billion pesos

2016

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Jan Apr Jul Oct Jan Apr Jul Oct Jan

Revenues 398.4 535.3 491.3 483.5 470.5 615.2 519.2 504.0 479.0

Ratio to GDP 13.8 17.0 16.1 13.5 15.5 18.5 16.3 13.4 14.7

Tax 355.4 469.1 449.9 444.7 403.7 489.4 462.7 459.8 424.7

Non-tax 43.0 66.3 41.4 38.9 66.9 125.8 56.6 44.2 54.2

Expenditures 482.5 505.2 468.4 525.5 504.0 567.9 558.5 600.1 591.5

Ratio to GDP 16.7 16.1 15.4 14.7 16.6 17.1 17.5 15.9 18.1

Interest Payments 103.1 56.6 97.7 63.8 100.6 55.5 99.6 53.6 102.6

Equity 0.1 0.3 0.8 0.5 0.1 0.2 — 0.4 8.2

Net Lending 4.9 1.5 2.0 5.0 2.2 0.4 1.8 5.2 3.5

Subsidy 1.2 48.3 12.7 18.2 3.7 40.3 11.8 22.2 8.2

Allotment to LGUs 85.1 89.0 85.8 84.4 97.1 96.8 96.8 96.8 107.1

Tax Expenditures 0.1 12.3 0.7 12.9 5.6 1.9 0.5 5.6 0.1

Others 288.0 297.1 268.7 340.8 294.7 372.8 347.9 416.2 361.8

Surplus/Deficit (-) -84.1 30.1 22.9 -42.0 -33.5 47.3 -39.3 -96.1 -112.5

Ratio to GDP -2.9 1.0 0.8 -1.2 -1.1 1.4 -1.2 -2.6 -3.4

Primary Balance 19.0 86.8 120.6 21.8 67.1 102.8 60.3 -42.5 -9.9

Ratio to GDP 0.7 2.8 4.0 0.6 2.2 3.1 1.9 -1.1 -0.3

Financing 1

7.0 31.3 69.9 67.0 -9.3 24.8 60.7 16.7 86.384.1 -30.1 -22.9 42.0 33.5 -47.3 39.3 96.1 112.5

External Borrowings -4.2 -5.3 26.6 -4.6 22.6 28.2 -0.6 14.5 14.6

Domestic Borrowings 11.2 36.6 43.3 71.6 -31.9 -3.5 61.3 2.2 71.6

Total Change in Cash: Deposit/Withdrawal (-) -170.8 88.5 85.5 34.6 30.7 29.8 23.4 -85.5 -116.3

Budgetary -77.1 61.5 92.8 25.0 -42.8 72.0 21.4 -79.4 -26.2

Non-Budgetary Accounts 2

-93.7 27.0 -7.4 9.6 73.6 -42.2 2.0 -6.1 -90.1

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.

— zero or nil

n.a. not available

Note: Details may not add up to total due to rounding off

Source: Bureau of the Treasury

20152014

4 CONSUMER PRICE INDEX IN THE PHILIPPINES


(2006=100)

Quarterly Average


ALL ITEMS 128.2 129.7 131.2 131.4 132.3 133.2 134.4 135.9 137.7 139.0 140.7 140.8 141.1 141.3 141.5 142.2 142.7

FOOD AND NON-ALCHOLIC BEVERAGES 138.0 138.9 141.0 141.5 141.7 142.2 144.1 147.1 149.7 151.8 155.6 156.4 156.9 156.4 157.3 158.5 159.4

of which: FOOD ITEMS 139.2 140.1 142.3 142.7 142.9 143.3 145.4 148.6 151.3 153.5 157.5 158.4 158.8 158.2 159.2 160.5 161.4

ALCOHOLIC BEVERAGES, TOBACCO AND NARCOTICS 125.8 128.4 129.7 130.8 158.4 168.5 170.1 171.1 173.6 175.2 176.1 177.8 180.5 181.8 182.6 184.8 189.3

NON-FOOD 121.9 123.7 124.8 124.8 125.3 126.0 126.7 127.4 128.6 129.3 129.7 129.2 129.4 130.0 129.8 129.9 130.1

CLOTHING AND FOOTWEAR 120.9 123.7 125.3 125.9 126.8 128.2 129.1 129.7 131.3 132.5 133.5 134.1 135.4 136.0 136.6 137.2 138.0

HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 123.4 125.9 127.2 126.5 126.9 127.7 127.8 129.1 130.9 131.5 130.9 129.6 129.4 130.1 128.7 128.1 128.1

of which: ELECTRICITY, GAS AND OTHER FUELS 137.4 140.1 141.6 139.2 138.7 139.2 138.7 142.6 146.8 146.9 143.6 138.7 134.0 134.9 129.5 126.5 124.7

FURNISHINGS, HOUSEHOLD EQUIPMENT

AND ROUTING MAINTENANCE OF THE HOUSE 118.2 120.6 122.4 123.2 124.0 125.0 125.5 126.0 127.4 128.1 128.9 129.4 130.2 130.8 131.1 131.5 132.2

HEALTH 126.2 128.0 129.3 129.8 130.7 131.8 132.7 133.2 135.0 135.8 137.2 137.7 138.6 138.9 139.5 140.2 141.2

TRANSPORT 125.2 126.3 125.5 125.9 126.3 126.1 126.8 126.9 127.7 127.8 128.2 126.9 126.8 127.8 127.6 128.1 127.2

of which: OPERATION OF PERSONAL TRANSPORT EQUIPMENT 128.4 128.6 126.3 127.9 128.4 127.2 130.5 130.8 133.8 134.3 133.4 127.9 119.8 122.7 120.5 119.5 116.7

COMMUNICATION 92.2 92.5 92.6 92.6 92.7 92.6 92.7 92.6 92.7 92.7 92.7 92.7 92.6 92.6 92.7 92.7 92.7

RECREATION AND CULTURE 108.3 109.3 110.1 110.2 110.7 111.6 112.8 112.9 113.5 113.8 114.3 114.6 114.8 115.1 115.5 115.8 116.1

EDUCATION 132.9 134.8 138.7 138.7 138.7 140.8 145.2 145.2 145.2 147.5 152.6 152.6 152.6 154.4 158.1 158.1 158.1

RESTAURANTS AND MISCELLANEOUS GOODS AND SERVICES 121.5 123.0 123.8 124.2 125.0 125.9 126.5 126.9 127.6 128.3 128.7 129.2 129.6 129.9 130.3 130.9 131.7


ALL ITEMS 0.5 1.2 1.2 0.2 0.7 0.7 0.9 1.1 1.3 0.9 1.2 0.1 0.2 0.1 0.1 0.5 0.4

FOOD AND NON-ALCHOLIC BEVERAGES -0.1 0.7 1.5 0.4 0.1 0.4 1.3 2.1 1.8 1.4 2.5 0.5 0.3 -0.3 0.6 0.8 0.6

of which: FOOD ITEMS -0.1 0.6 1.6 0.3 0.1 0.3 1.5 2.2 1.8 1.5 2.6 0.6 0.3 -0.4 0.6 0.8 0.6


NON-FOOD 1.0 1.5 0.9 0.0 0.4 0.6 0.6 0.6 0.9 0.5 0.3 -0.4 0.2 0.5 -0.2 0.1 0.2


HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 1.4 2.0 1.0 -0.6 0.3 0.6 0.1 1.0 1.4 0.5 -0.5 -1.0 -0.2 0.5 -1.1 -0.5 0.0

of which: ELECTRICITY, GAS AND OTHER FUELS 2.2 2.0 1.1 -1.7 -0.4 0.4 -0.4 2.8 2.9 0.1 -2.2 -3.4 -3.4 0.7 -4.0 -2.3 -1.4



HEALTH 0.6 1.4 1.0 0.4 0.7 0.8 0.7 0.4 1.4 0.6 1.0 0.4 0.7 0.2 0.4 0.5 0.7

TRANSPORT 0.9 0.9 -0.6 0.3 0.3 -0.2 0.6 0.1 0.6 0.1 0.3 -1.0 -0.1 0.8 -0.2 0.4 -0.7

of which: OPERATION OF PERSONAL TRANSPORT EQUIPMENT 2.3 0.2 -1.8 1.3 0.4 -0.9 2.6 0.2 2.3 0.4 -0.7 -4.1 -6.3 2.4 -1.8 -0.8 -2.3

COMMUNICATION 0.0 0.3 0.1 0.0 0.1 -0.1 0.1 -0.1 0.1 0.0 0.0 0.0 -0.1 0.0 0.1 0.0 0.0


EDUCATION 0.1 1.4 2.9 0.0 0.0 1.5 3.1 0.0 0.0 1.6 3.5 0.0 0.0 1.2 2.4 0.0 0.0



ALL ITEMS 3.1 2.9 3.6 3.0 3.2 2.7 2.4 3.4 4.1 4.4 4.7 3.6 2.5 1.7 0.6 1.0 1.1




NON-FOOD 3.9 3.7 3.7 3.4 2.8 1.9 1.5 2.1 2.6 2.6 2.4 1.4 0.6 0.5 0.1 0.5 0.5


HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 4.8 4.4 5.0 3.9 2.8 1.4 0.5 2.1 3.2 3.0 2.4 0.4 -1.1 -1.1 -1.7 -1.2 -1.0

of which: ELECTRICITY, GAS AND OTHER FUELS 9.2 6.1 6.7 3.6 0.9 -0.6 -2.0 2.4 5.8 5.5 3.5 -2.7 -8.7 -8.2 -9.8 -8.8 -6.9



HEALTH 2.8 3.4 3.4 3.4 3.6 3.0 2.6 2.6 3.3 3.0 3.4 3.4 2.7 2.3 1.7 1.8 1.9

TRANSPORT 4.3 2.3 1.2 1.5 0.9 -0.2 1.0 0.8 1.1 1.3 1.1 0.0 -0.7 0.0 -0.5 0.9 0.3

of which: OPERATION OF PERSONAL TRANSPORT EQUIPMENT 5.3 1.3 0.3 1.9 0.0 -1.1 3.3 2.3 4.2 5.6 2.2 -2.2 -10.5 -8.6 -9.7 -6.6 -2.6

COMMUNICATION -0.3 0.1 0.2 0.4 0.5 0.1 0.1 0.0 0.0 0.1 0.0 0.1 -0.1 -0.1 0.0 0.0 0.1


EDUCATION 4.8 4.7 4.5 4.4 4.4 4.5 4.7 4.7 4.7 4.8 5.1 5.1 5.1 4.7 3.6 3.6 3.6


Source: Philippine Statistics Authority (PSA)

2016

2016

2016

2015

2015

2015

2014

2014

2014

Quarter-on-Quarter Change (in percent)

2 0 1 2

2 0 1 2

Year-on-Year Change (in percent)

2 0 1 2 2013

2013

2013

4a CONSUMER PRICE INDEX IN METRO MANILA


(2006=100)

Quarterly Average


ALL ITEMS 122.9 123.7 125.6 125.4 125.7 125.8 126.5 127.8 129.2 130.3 131.4 131.0 131.6 131.6 131.9 132.1 132.0




NON-FOOD 119.4 120.3 121.7 121.4 121.7 121.8 122.0 122.6 123.8 124.6 124.6 123.8 124.7 125.1 124.7 124.2 124.0






HEALTH 130.0 130.8 132.4 132.6 134.5 134.7 136.5 136.6 139.7 140.4 143.4 143.6 145.3 145.4 147.0 147.0 147.3

TRANSPORT 114.9 114.4 113.8 114.3 114.2 113.5 114.2 114.6 115.6 115.6 115.6 113.7 116.5 117.2 116.7 116.9 116.0


COMMUNICATION 93.1 93.7 93.9 93.9 93.9 93.9 93.9 93.9 94.1 94.1 94.1 94.1 94.1 94.2 94.3 94.3 94.3


EDUCATION 135.5 137.0 140.0 140.0 140.0 142.1 146.2 146.2 146.2 149.0 154.5 154.5 154.5 157.3 163.0 163.0 163.0



ALL ITEMS 0.7 0.7 1.5 -0.2 0.2 0.1 0.6 1.0 1.1 0.9 0.8 -0.3 0.5 0.0 0.2 0.2 -0.1

FOOD AND NON-ALCHOLIC BEVERAGES -1.0 0.3 2.5 -0.1 -0.2 -0.1 1.3 2.3 1.2 1.4 2.7 0.3 0.0 -0.8 1.4 1.2 0.1

of which: FOOD ITEMS -1.1 0.2 2.6 -0.1 -0.3 -0.1 1.4 2.5 1.3 1.5 2.8 0.3 -0.1 -0.9 1.5 1.3 0.1


NON-FOOD 1.4 0.8 1.2 -0.2 0.2 0.1 0.2 0.5 1.0 0.6 0.0 -0.6 0.7 0.3 -0.3 -0.4 -0.2


HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 1.5 0.9 1.3 -0.9 0.1 0.0 -0.4 1.0 1.0 0.6 -1.0 -1.4 0.6 0.2 -1.5 -1.0 -0.4

of which: ELECTRICITY, GAS AND OTHER FUELS 1.5 1.3 3.0 -3.7 -1.2 -0.4 -1.7 3.4 2.9 0.5 -4.3 -5.2 -3.0 -1.2 -9.0 -4.4 -1.3



HEALTH 0.8 0.6 1.2 0.2 1.4 0.1 1.3 0.1 2.3 0.5 2.1 0.1 1.2 0.1 1.1 0.0 0.2

TRANSPORT 1.1 -0.4 -0.5 0.4 -0.1 -0.6 0.6 0.4 0.9 0.0 0.0 -1.6 2.5 0.6 -0.4 0.2 -0.8

of which: OPERATION OF PERSONAL TRANSPORT EQUIPMENT 2.1 -0.9 -0.3 1.7 -1.0 -2.2 2.6 1.2 2.8 -0.1 -1.0 -4.8 -5.9 2.0 -2.2 -0.9 -2.9

COMMUNICATION -0.1 0.6 0.2 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0


EDUCATION 0.0 1.1 2.2 0.0 0.0 1.5 2.9 0.0 0.0 1.9 3.7 0.0 0.0 1.8 3.6 0.0 0.0



ALL ITEMS 2.8 2.3 3.6 2.7 2.3 1.7 0.7 1.9 2.8 3.6 3.9 2.5 1.9 1.0 0.4 0.8 0.3




NON-FOOD 3.6 2.8 3.7 3.1 1.9 1.2 0.2 1.0 1.7 2.3 2.1 1.0 0.7 0.4 0.1 0.3 -0.6


HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 4.5 3.1 4.4 2.8 1.4 0.5 -1.2 0.6 1.6 2.3 1.6 -0.7 -1.1 -1.5 -2.0 -1.6 -2.7

of which: ELECTRICITY, GAS AND OTHER FUELS 8.1 4.9 8.0 2.0 -0.8 -2.5 -6.9 0.1 4.2 5.1 2.2 -6.3 -11.6 -13.1 -17.3 -16.6 -15.1



HEALTH 2.6 3.0 2.8 2.8 3.5 3.0 3.1 3.0 3.9 4.2 5.1 5.1 4.0 3.6 2.5 2.4 1.4

TRANSPORT 3.7 0.1 -0.2 0.5 -0.6 -0.8 0.4 0.3 1.2 1.9 1.2 -0.8 0.8 1.4 1.0 2.8 -0.4

of which: OPERATION OF PERSONAL TRANSPORT EQUIPMENT 4.1 -0.5 0.2 2.5 -0.6 -1.9 1.0 0.5 4.3 6.6 2.9 -3.2 -11.3 -9.4 -10.6 -7.0 -4.0

COMMUNICATION -0.5 0.3 0.6 0.8 0.9 0.2 0.0 0.0 0.2 0.2 0.2 0.2 0.0 0.1 0.2 0.2 0.2


EDUCATION 3.8 3.6 3.3 3.3 3.3 3.7 4.4 4.4 4.4 4.9 5.7 5.7 5.7 5.6 5.5 5.5 5.5



2015

2 0 1 2

2 0 1 2 2015

2015

2016

2016

2016



2013

2013

2 0 1 2

2014

2014

20142013

4b CONSUMER PRICE INDEX IN AREAS OUTSIDE METRO MANILA


(2006=100)

Quarterly Average


ALL ITEMS 129.8 131.6 133.0 133.3 134.4 135.5 136.8 138.5 140.4 141.7 143.6 143.8 144.1 144.3 144.6 145.3 146.0




NON-FOOD 122.8 125.1 126.0 126.1 126.7 127.7 128.6 129.3 130.6 131.2 131.7 131.3 131.2 131.9 131.8 132.1 132.4






HEALTH 125.1 127.2 128.5 129.0 129.7 131.0 131.7 132.3 133.7 134.6 135.5 136.1 136.7 137.1 137.5 138.3 139.5

TRANSPORT 128.4 130.0 129.1 129.5 130.1 130.0 130.7 130.7 131.4 131.7 132.1 131.0 130.0 131.2 130.9 131.6 130.7


COMMUNICATION 91.8 91.9 92.0 92.0 92.1 92.0 92.1 92.0 92.1 92.1 92.0 92.0 91.9 91.9 91.9 91.9 91.9


EDUCATION 132.1 134.2 138.3 138.3 138.3 140.4 144.9 144.9 144.9 147.1 152.0 152.0 152.0 153.5 156.6 156.7 156.7



ALL ITEMS 0.4 1.4 1.1 0.2 0.8 0.8 1.0 1.2 1.4 0.9 1.3 0.1 0.2 0.1 0.2 0.5 0.5

FOOD AND NON-ALCHOLIC BEVERAGES 0.1 0.8 1.3 0.4 0.3 0.3 1.4 2.1 1.8 1.4 2.5 0.6 0.3 -0.2 0.4 0.8 0.6

of which: FOOD ITEMS 0.0 0.7 1.4 0.3 0.3 0.3 1.5 2.1 1.9 1.4 2.6 0.6 0.3 -0.2 0.4 0.8 0.6


NON-FOOD 0.7 1.9 0.7 0.1 0.5 0.8 0.7 0.5 1.0 0.5 0.4 -0.3 -0.1 0.5 -0.1 0.2 0.2


HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 1.3 2.6 0.9 -0.3 0.3 0.9 0.4 1.1 1.5 0.4 -0.2 -0.9 -0.5 0.7 -0.9 -0.3 0.2

of which: ELECTRICITY, GAS AND OTHER FUELS 2.6 2.0 0.5 -1.0 -0.1 0.7 0.0 2.4 3.3 -0.1 -1.7 -2.8 -3.5 1.2 -2.6 -1.7 -1.5



HEALTH 0.4 1.7 1.0 0.4 0.5 1.0 0.5 0.5 1.1 0.7 0.7 0.4 0.4 0.3 0.3 0.6 0.9

TRANSPORT 0.8 1.2 -0.7 0.3 0.5 -0.1 0.5 0.0 0.5 0.2 0.3 -0.8 -0.8 0.9 -0.2 0.5 -0.7

of which: OPERATION OF PERSONAL TRANSPORT EQUIPMENT 1.9 1.0 -2.0 1.2 1.0 -0.5 2.5 -0.1 2.2 0.5 -0.6 -3.9 -6.5 2.5 -1.6 -0.8 -2.2

COMMUNICATION 0.0 0.1 0.1 0.0 0.1 -0.1 0.1 -0.1 0.1 0.0 -0.1 0.0 -0.1 0.0 0.0 0.0 0.0


EDUCATION 0.1 1.6 3.1 0.0 0.0 1.5 3.2 0.0 0.0 1.5 3.3 0.0 0.0 1.0 2.0 0.1 0.0



ALL ITEMS 3.2 3.1 3.6 3.1 3.5 3.0 2.9 3.9 4.5 4.6 5.0 3.8 2.6 1.8 0.7 1.0 1.3




NON-FOOD 4.0 4.0 3.7 3.4 3.2 2.1 2.1 2.5 3.1 2.7 2.4 1.5 0.5 0.5 0.1 0.6 0.9


HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 5.0 5.0 5.3 4.5 3.5 1.7 1.2 2.7 3.9 3.4 2.8 0.8 -1.2 -0.9 -1.6 -1.0 -0.3

of which: ELECTRICITY, GAS AND OTHER FUELS 9.7 6.3 6.3 4.1 1.3 0.0 -0.5 3.0 6.5 5.6 3.8 -1.5 -8.0 -6.7 -7.6 -6.6 -4.6



HEALTH 2.8 3.5 3.6 3.5 3.7 3.0 2.5 2.6 3.1 2.7 2.9 2.9 2.2 1.9 1.5 1.6 2.0

TRANSPORT 4.5 2.8 1.6 1.6 1.3 0.0 1.2 0.9 1.0 1.3 1.1 0.2 -1.1 -0.4 -0.9 0.5 0.5

of which: OPERATION OF PERSONAL TRANSPORT EQUIPMENT 5.4 2.0 0.7 1.9 1.1 -0.4 4.2 2.9 4.1 5.1 2.0 -1.8 -10.2 -8.4 -9.3 -6.4 -2.1

COMMUNICATION -0.2 -0.1 0.0 0.2 0.3 0.1 0.1 0.0 0.0 0.1 -0.1 0.0 -0.2 -0.2 -0.1 -0.1 0.0


EDUCATION 5.1 5.1 4.9 4.8 4.7 4.6 4.8 4.8 4.8 4.8 4.9 4.9 4.9 4.4 3.0 3.1 3.1



2016

2016

2016

2013

2013


2014

2014

2014

2 0 1 2


20152013

2015

2015

2 0 1 2

2 0 1 2

5 MONETARY INDICATORS (DCS CONCEPT: SRF-Based) 1

as of periods indicated

levels in billion pesos

2016

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 p

Q1 r

A. Liquidity

1. M4 (2+7) 8,215.0 8,351.9 8,523.1 9,050.8 9,016.9 9,126.2 9,334.3 9,885.0 10,037.8

2. M3 : Broad Money Liabilities (3+6) 7,029.4 7,100.1 7,219.2 7,703.9 7,650.0 7,755.4 7,851.4 8,426.2 8,548.0

% to GDP 59.6 58.8 58.6 60.9 59.8 59.8 59.9 63.3 63.1

3. M2 (4+5) 6,795.8 6,864.3 6,949.3 7,396.3 7,344.3 7,434.5 7,510.8 8,068.8 8,209.9

% to GDP 57.7 56.9 56.4 58.5 57.4 57.3 57.3 60.6 60.6

4. M1: Currency Outside Depository Corporations and Transferable Deposits (Narrow Money ) 2,051.6 2,107.2 2,134.1 2,316.4 2,312.1 2,379.2 2,453.3 2,667.4 2,712.1

% to GDP 17.4 17.5 17.3 18.3 18.1 18.3 18.7 20.0 20.0

Currency Outside Depository Corporations (Currency in Circulation) 586.2 580.3 588.0 713.7 658.9 653.8 670.0 791.5 766.3

Transferable Deposits (Demand Deposits) 1,465.4 1,526.9 1,546.1 1,602.6 1,653.2 1,725.4 1,783.3 1,875.9 1,945.9

5. Other deposits included in broad money 4,744.3 4,757.1 4,815.2 5,080.0 5,032.2 5,055.3 5,057.5 5,401.5 5,497.8

Savings Deposits 3,084.4 3,007.0 3,077.0 3,191.8 3,209.8 3,269.9 3,357.5 3,586.1 3,694.4

Time Deposits 1,659.8 1,750.1 1,738.1 1,888.2 1,822.4 1,785.4 1,700.0 1,815.4 1,803.4

6. Securities Other Than Shares Included in Broad Money (Deposit Substitutes) 233.5 235.8 269.9 307.6 305.6 320.9 340.7 357.3 338.1

7. Transferable & Other Deposits in Foreign Currency (FCDU Deposits-Residents) 1,185.6 1,251.7 1,303.9 1,346.8 1,366.9 1,370.8 1,482.8 1,458.8 1,489.8

8. Liabilities Excluded from Broad-Money (Other Liabilities) 1,693.2 1,708.6 1,791.6 1,754.4 1,856.1 1,860.1 2,015.3 1,974.3 2,139.6

B. Domestic Claims 6,332.0 6,473.9 6,605.5 7,053.0 6,997.4 7,114.6 7,387.2 7,860.5 8,077.4

1. Net Claims on Central Government 1,188.5 1,110.2 1,033.6 1,119.1 1,096.9 1,124.5 1,209.0 1,263.0 1,465.8

Claims on Central Government 1,735.0 1,733.2 1,738.6 1,862.7 1,862.6 1,926.4 2,019.0 1,993.9 2,085.2

Less: Liabilities to Central Government 546.5 623.1 705.0 743.7 765.7 801.9 810.0 730.8 619.4

2. Claims on Other Sectors 5,143.4 5,363.7 5,571.9 5,933.9 5,900.4 5,990.1 6,178.2 6,597.4 6,611.5

Claims on Other Financial Corporations 559.5 574.6 613.6 630.3 628.2 628.8 667.9 680.6 689.5

Claims on State and Local Government 73.3 71.9 70.5 71.5 70.5 70.6 74.0 76.6 77.9

Claims on Public Nonfinancial Corporations 265.1 271.2 268.0 269.3 271.9 274.2 281.4 278.0 282.1

Claims on Private Sector 4,245.5 4,446.0 4,619.8 4,962.9 4,929.9 5,016.5 5,154.9 5,562.2 5,562.0

C. Net Foreign Assets 3,576.3 3,586.6 3,709.1 3,752.1 3,875.6 3,871.7 3,962.4 3,998.8 4,100.1

1. Bangko Sentral ng Pilipinas 3,520.0 3,476.6 3,524.1 3,514.4 3,556.8 3,598.5 3,731.8 3,762.8 3,778.5

Claims on Non-residents 3,597.3 3,551.7 3,599.6 3,587.4 3,627.5 3,671.8 3,806.9 3,837.3 3,852.5

Less: Liabilities to Non-residents 77.3 75.2 75.4 73.0 70.8 73.2 75.0 74.4 74.0

2. Other Depository Corporations 56.3 110.0 185.0 237.7 318.9 273.2 230.5 235.9 321.6

Claims on Non-residents 810.2 828.5 864.0 1,028.7 964.1 951.0 985.1 1,023.9 1,070.7

Less: Liabilities to Non-residents 753.9 718.5 679.0 790.9 645.3 677.7 754.5 787.9 749.1

1 Based on the Standardized Report Forms (SRFs), a unified framework for reporting monetary and financial statistics to the International Monetary Fund.p Preliminaryr Revised

Note : Details may not add up to totals due to rounding.

Source : Bangko Sentral ng Pilipinas

20152014

6 SELECTED DOMESTIC INTEREST RATES

for periods indicated; in percent per annum

2014 2015 2016 2014 2015 2016

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

4.1 4.4 4.7 3.6 2.4 1.7 0.6 1 1.2

Interbank Call Loans 2.0147 2.0618 2.3356 2.5384 2.5266 2.5225 2.5241 2.5291 2.5289 -2.0853 -2.3382 -2.3644 -1.0616 0.1266 0.8225 1.9241 1.5291 1.3289

Savings Deposits 0.5370 0.6270 0.6460 0.7030 0.7170 0.6720 0.7210 0.7270 0.7370 -3.5630 -3.7730 -4.0540 -2.8970 -1.6830 -1.0280 0.12100 -0.2730 -0.4630

Time Deposits (All Maturities) 0.9740 0.9870 1.0480 1.3470 1.3760 1.5220 1.4720 1.6290 1.6410 -3.1260 -3.4130 -3.6520 -2.2530 -1.0240 -0.1780 0.8720 0.6290 0.4410

Manila Reference Rates (All Maturities) 2

1.2500 1.3125 1.3750 N.T. N.T. N.T. N.T. N.T. N.T. -2.8500 -3.0875 -3.3250 N.T. N.T. N.T. N.T. N.T. N.T.

Lending Rates

6.7287 6.8083 6.8860 6.7818 6.8698 6.9390 6.9376 6.7607 6.8407 2.6287 2.4083 2.1860 3.1818 4.4698 5.2390 6.3376 5.7607 5.6407

4.3688 4.3417 4.3861 4.4397 4.5031 4.5183 4.5025 4.3579 4.4055 0.2688 -0.0583 -0.3139 0.8397 2.1031 2.8183 3.9025 3.3579 3.2055

5.5000 5.4780 5.5350 5.5820 5.4280 5.5150 5.6250 5.7390 5.6310 1.4000 1.0780 0.8350 1.9820 3.0280 3.8150 5.0250 4.7390 4.4310

Bangko Sentral Rates

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. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T.

3.5000 3.5000 3.7500 4.0000 4.0000 4.0000 4.0000 4.0000 4.0000 -0.6000 -0.9000 -0.9500 0.4000 1.6000 2.3000 3.4000 3.0000 2.8000

3.5000 3.5000 3.7500 4.0000 4.0000 4.0000 4.0000 4.0000 4.0000 -0.6000 -0.9000 -0.9500 0.4000 1.6000 2.3000 3.4000 3.0000 2.8000

3.5608 3.5460 3.7390 4.0515 4.0810 4.0926 4.0352 4.1087 5.1642 -0.5392 -0.8540 -0.9610 0.4515 1.6810 2.3926 3.4352 3.1087 3.9642

Rate on Government Securities

Treasury Bills, All Maturities 1.2880 1.5000 1.5000 1.5720 1.6910 2.0780 1.9980 1.7440 1.6130 -2.8120 -2.9000 -3.2000 -2.0280 -0.7090 0.3780 1.3980 0.7440 0.4130

1.0650 1.2740 1.2580 1.2860 1.4690 1.9400 1.8610 1.7100 1.5550 -3.0350 -3.1260 -3.4420 -2.3140 -0.9310 0.2400 1.2610 0.7100 0.3550

1.4000 1.5890 1.5820 1.7000 1.7290 2.2070 2.0140 1.6970 1.5800 -2.7000 -2.8110 -3.1180 -1.9000 -0.6710 0.5070 1.4140 0.6970 0.3800

1.5400 1.8630 1.8090 1.8250 1.9480 2.2630 2.2000 1.8970 1.7230 -2.5600 -2.5370 -2.8910 -1.7750 -0.4520 0.5630 1.6000 0.8970 0.5230

Government Securities in the Secondary Market 5

3.9 4.4 4.4 2.7 2.4 1.2 0.4 1.5 1.1

3 Months 1.6917 1.3229 1.7104 2.5409 2.2714 2.0765 1.6817 2.6667 1.7650 -2.2083 -3.0771 -2.6896 -0.1591 -0.1286 0.8765 1.2817 1.1667 0.6650

6 Months 2.0367 1.4938 1.9479 2.6432 2.5795 2.1980 1.7967 2.9183 1.8950 -1.8633 -2.9062 -2.4521 -0.0568 0.1795 0.9980 1.3967 1.4183 0.7950

1-Year 2.3125 1.8917 2.1729 2.6955 2.6886 2.4297 2.5467 2.3710 1.7313 -1.5875 -2.5083 -2.2271 -0.0045 0.2886 1.2297 2.1467 0.8710 0.6313

2-Years 2.7563 2.8542 2.9813 3.0568 3.1959 2.6999 2.6143 3.9847 3.4700 -1.1437 -1.5458 -1.4187 0.3568 0.7959 1.4999 2.2143 2.4847 2.3700

3-Years 3.1650 2.8917 3.3833 3.4500 3.4136 3.0281 3.1016 3.6625 3.6900 -0.7350 -1.5083 -1.0167 0.7500 1.0136 1.8281 2.7016 2.1625 2.5900

4-Years 3.3917 3.1750 3.5083 3.5705 3.5864 3.7717 3.7263 3.8750 3.2332 -0.5083 -1.2250 -0.8917 0.8705 1.1864 2.5717 3.3263 2.3750 2.1332

5-Years 3.7479 3.9812 4.2146 3.6795 3.8273 3.8900 3.4923 3.9250 3.4583 -0.1521 -0.4188 -0.1854 0.9795 1.4273 2.6900 3.0923 2.4250 2.3583

7-Years 3.8615 4.0292 4.1229 4.1475 3.8932 3.7189 4.1617 4.5853 4.2283 -0.0385 -0.3708 -0.2771 1.4475 1.4932 2.5189 3.7617 3.0853 3.1283

10-Years 4.4562 4.1667 4.3475 4.3705 4.0614 4.3550 3.7995 4.1000 4.6900 0.5562 -0.2333 -0.0525 1.6705 1.6614 3.1550 3.3995 2.6000 3.5900

20-Years 5.3938 5.3750 5.3125 5.1727 4.9850 4.6511 5.1350 5.5217 5.2317 1.4938 0.9750 0.9125 2.4727 2.5850 3.4511 4.7350 4.0217 4.1317

25-Years 5.6354 5.4329 5.3750 4.9500 4.7659 N.T 4.7280 4.8916 N.T 1.7354 1.0329 0.9750 2.2500 2.3659 N.T. 4.3280 3.3916 N.T.

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. Per BSP Circular No. 846, the generation and publication of MRR rates will be discontinued effective 17 September 2014. September data covers bank reports prior to the said date.

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; (For Q1 2013 to Q1 2015, data refers to PDST-F while for Q2 2015 to present, it refers to PDST-R2)

pPreliminary

rRevised

N.T. - No transactions

Source: Bangko Sentral ng Pilipinas

NOMINAL INTEREST RATES REAL INTEREST RATES 1

182-Days

Low

All Maturities 3

R/P (Overnight) 4

High

364-Days

R/P (Term) 4

RR/P (Overnight) 4

RR/P (Term) 4

Rediscounting

91-Days

7 NUMBER OF FINANCIAL INSTITUTIONS 1


Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

T o t a l 28,065 28,094 28,128 28,243 28,342 28,330 28,327 28,482

Head Offices 6,943 6,888 6,840 6,747 6,733 6,697 6,638 6,588

Branches/Agencies 21,122 21,206 21,288 21,496 21,609 21,633 21,689 21,894

Banks 10,020 10,120 10,207 10,361 10,456 10,528 10,561 10,756

Head Offices 667 664 652 648 646 638 635 632


Universal and Commercial Banks 5,514 5,583 5,738 5,833 5,901 5,946 5,969 6,060

Head Offices 36 36 36 36 36 36 37 40


Thrift Banks 1,856 1,878 1,873 1,920 1,927 2,013 1,999 2,086

Head Offices 70 70 69 69 69 70 69 68


Savings and Mortgage Banks 1,219 1,242 1,248 1,280 1,317 1,386 1,356 1,517

Head Offices 28 28 28 28 28 29 28 28


Private Development Banks 437 432 440 444 408 416 417 338

Head Offices 19 19 19 19 19 19 19 18

Branches/Agencies 418 413 421 425 389 397 398 320

Stock Savings and Loan Assns. 171 175 154 165 171 180 195 200

Head Offices 19 19 18 18 18 18 18 18


Microfinance Banks 29 29 31 31 31 31 31 31

Head Offices 4 4 4 4 4 4 4 4


Rural Banks 2,650 2,659 2,596 2,608 2,628 2,569 2,593 2,610

Head Offices 561 558 547 543 541 532 529 524


Non-Banks 18,045 17,974 17,921 17,882 17,886 17,802 17,766 17,726

Head Offices 6,276 6,224 6,188 6,099 6,087 6,059 6,003 5,956


Investment Houses 26 25 25 25 25 25 25 25

Head Offices 16 15 15 15 15 15 15 15


Finance Companies 88 88 88 88 88 88 110 110

Head Offices 20 20 20 20 20 20 22 22


ABB Forex Corporations - - - - - - 5 5

Head Offices - - - - - - 5 5

Branches/Agencies - - - - - - - -

Investment Companies 3 3 2 2 2 2 2 2

Head Offices 3 3 2 2 2 2 2 2


Securities Dealers/Brokers 13 13 13 13 13 13 13 13

Head Offices 13 13 13 13 13 13 13 13


Pawnshops 17,584 17,513 17,461 17,422 17,426 17,340 17,278 17,238

Head Offices 6,022 5,971 5,936 5,847 5,835 5,807 5,745 5,698


Lending Investors 1 1 1 1 1 1 1 1

Head Offices 1 1 1 1 1 1 1 1


Non-Stock Savings and Loan Assns. 198 199 199 199 199 201 200 200

Head Offices 71 71 71 71 71 71 70 70


Private Insurance Companies 2

110 110 110 110 110 110 110 110

Head Offices 108 108 108 108 108 108 108 108


Government Non-Banks 4 4 4 4 4 4 4 4

Head Offices 4 4 4 4 4 4 4 4


Venture Capital Corporations - - - - - - - -

Head Offices - - - - - - - -


Credit Card Companies 3 3 3 3 3 3 3 3

Head Offices 3 3 3 3 3 3 3 3


Other Non-Bank with QBF 1 1 1 1 1 1 1 1

Head Offices 1 1 1 1 1 1 1 1


Electronic Money Issuer 4 4 4 4 4 4 4 4

Head Offices 4 4 4 4 4 4 4 4


Remittance Agent 1 1 1 1 1 1 1 1

Head Offices 1 1 1 1 1 1 1 1


Credit Granting Entities 9 9 9 9 9 9 9 9

Head Offices 9 9 9 9 9 9 9 9


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


20152014

8 TOTAL RESOURCES OF THE PHILIPPINE FINANCIAL SYSTEM 1


in billion pesos

2016

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 r

Q1 p

T o t a l 9,522.0 9,797.5 9,981.4 10,633.4 10,772.5 11,285.1 11,820.7 12,814.6 13,032.3 13,342.1 13,488.3 14,446.6 14,322.0 14,453.5 14,784.1 15,356.0 15,472.7

Banks 7,456.0 7,663.3 7,877.5 8,369.0 8,434.7 8,925.1 9,454.8 10,292.8 10,465.2 10,614.6 10,751.0 11,546.2 11,374.2 11,502.7 11,863.2 12,406.3 12,522.9

Universal and Commercial Banks

6,668.0 6,877.6 7,054.3 7,486.6 7,547.6 7,995.5 8,505.4 9,300.4 9,412.5 9,545.6 9,658.0 10,398.4 10,238.9 10,327.9 10,670.8 11,159.2 11,254.8

Thrift Banks

608.6 606.2 622.4 681.5 679.3 739.8 764.6 809.1 825.0 851.1 866.6 916.2 899.3 964.7 979.6 1,034.1 1,055.1

Rural Banks 179.4 179.4 200.8 200.8 207.9 189.8 184.8 183.3 227.7 217.9 226.4 231.6 236.0 210.1 212.8 213.0 213.0a

Non-Banks 2

2,065.9 2,134.3 2,103.9 2,264.4 2,337.8 2,359.9 2,365.9 2,521.8 2,567.1 2,727.5 2,737.3 2,900.3 2,947.8 2,950.7 2,920.9 2,949.8 2,949.8a

1 Excludes the Bangko Sentral ng Pilipinas; amount includes allowance for probable losses.

2 Includes Investment Houses, Finance Companies, Investment Companies, Securities Dealers/Brokers, Pawnshops, Lending Investors, Non Stocks Savings

and Loan Associations, Credit Card Companies (which are under BSP supervision), and Private and Government Insurance Companies (i.e., SSS and GSIS).a

As of end-December 2015p

Preliminary

Notes: Data on Non-Banks are based on Consolidated Statement of Condition (CSOC).

Data on Rural Banks were based on CSOC up to March 2010. Data from April 2010 onwards are based on FRP. Details may not add up to total due to rounding off.


(3)

201420132012 2015

Institutions

(1)

(2)

9 NON-PERFORMING LOANS (NPL), TOTAL LOANS AND LOAN LOSS PROVISIONS OF THE BANKING SYSTEM 1

end-of-period

in billion pesos

Non-Performing Loans 2

Gross Non-Performing Loans 3

Net Non-Performing Loans 3

Total Loans Loan Loss Provisions

UB&KBs TBs RBs Total UB&KBs TBs RBs Total UB&KBs TBs RBs Total UB&KBs TBs RBs Total UB&KBs TBs RBs Total

2006 117.410 20.550 9.045 147.005 2073.698 249.993 83.234 2406.925 97.031 10.138 3.820 110.989

2007 97.634 20.231 9.841 127.706 2195.110 295.499 100.215 2590.824 91.123 9.560 3.587 104.270

2008 88.191 20.107 9.563 117.861 2502.662 303.632 95.892 2902.186 88.201 10.774 3.636 102.611

2009 80.912 23.396 10.157 114.465 2725.200 321.742 97.534 3144.476 90.898 12.097 3.952 106.947

2010

Mar 81.382 25.189 9.363 115.934 2531.003 320.902 99.346 2951.251 91.982 12.702 4.380 109.064

Jun 87.668 25.868 9.491 123.027 2682.230 326.275 100.778 3109.283 95.394 13.723 4.603 113.720

Sep 83.141 28.177 9.417 120.735 2670.645 343.058 97.794 3111.497 97.379 14.500 4.533 116.412

Dec 80.215 26.323 10.249 116.787 2802.041 359.484 103.695 3265.220 95.040 14.123 5.102 114.265

2011

Mar 82.410 25.911 11.838 120.159 2759.938 354.660 117.155 3231.753 99.197 16.645 5.970 121.812

Jun 74.143 22.746 12.198 109.087 3030.631 367.867 119.701 3518.199 93.548 13.420 6.113 113.081

Sep 74.326 22.699 12.127 109.152 3021.051 364.469 121.659 3507.179 91.944 13.618 6.296 111.858

Dec 71.938 21.953 12.263 106.154 3222.105 383.731 120.963 3726.799 90.903 12.946 6.176 110.025

2012

Mar 106.354 26.090 13.940 146.384 18.918 11.550 7.470 37.938 3192.496 402.540 123.740 3718.776 124.968 18.170 7.690 150.828

Jun 102.098 24.360 14.370 140.828 11.393 9.530 7.350 28.273 3388.091 432.990 124.870 3945.951 127.269 18.270 8.230 153.769

Sep 103.420 25.830 14.800 144.050 13.224 11.340 7.060 31.624 3444.161 410.520 128.780 3983.461 128.598 18.560 9.000 156.158

Dec 100.610 26.530 15.850 142.990 11.310 12.220 6.910 30.440 3650.760 449.260 128.580 4228.600 128.460 18.090 10.220 156.770

2013

Mar 99.357 26.930 17.250 143.537 16.245 12.240 8.073 36.558 3625.043 439.240 129.473 4193.756 127.487 18.960 10.420 156.867

Jun 100.912 27.840 15.910 144.662 14.569 12.320 7.420 34.309 3760.891 468.830 128.740 4358.461 131.291 20.130 9.750 161.171

Sep 100.638 28.895 16.400 145.933 16.497 13.088 7.870 37.455 3922.085 490.705 126.790 4539.580 131.338 20.199 9.740 161.277

Dec 90.509 27.729 17.306 135.544 8.050 12.291 8.250 28.591 4256.963 508.199 131.788 4896.950 130.440 20.107 10.327 160.874

2014

Mar 93.323 27.057 18.114 138.494 9.939 13.146 8.800 31.885 4329.734 547.791 137.889 5015.414 131.790 18.771 10.612 161.173

Jun 94.798 27.165 17.867 139.830 12.437 12.931 8.895 34.263 4513.288 562.850 132.888 5209.026 133.317 19.088 10.240 162.645

Sep 96.181 26.049 16.476 138.706 14.129 11.572 8.257 33.958 4704.656 575.778 134.611 5415.045 133.708 19.375 9.486 162.569

Dec 93.055 25.373 16.402 134.830 15.289 11.346 8.104 34.739 5117.884 576.057 138.436 5832.377 132.542 19.468 9.563 161.573

2015p

Mar 97.365 27.293 16.758 141.416 18.093 12.116 8.407 38.616 4991.914 600.981 139.144 5732.039 134.544 20.460 9.646 164.650

Jun 94.122 29.954 14.254 138.330 15.356 14.141 6.501 35.998 5110.488 638.154 119.780 5868.422 134.924 21.456 8.910 165.290

Sep 95.241 30.503 13.997 139.741 18.006 14.300 5.998 38.304 5244.589 668.457 121.416 6034.462 133.090 22.036 9.196 164.322

Dec 91.598 31.199 13.706 136.503 21.672 14.692 5.513 41.877 5719.665 689.019 118.711 6527.395 129.220 23.045 9.381 161.646

2016p

Mar 97.112 34.346 13.706a

145.164 29.065 16.288 5.513a

50.866 5659.766 728.258 118.711a

6506.735 129.193 25.001 9.381a

163.575

1Data include banks under liquidation, foreign office transactions and interbank loans

2Starting Sept. 2002, for supervisory purposes, computation of NPL was based on BSP Circular No. 351 which defines total loans as gross of allowance for probable losses and interbank loans less loans classified as loss. This has been discontinued in 2013.

For comparability purposes, 2012 was revised based on the new definition (BSP Circular No. 772). 3

Starting January 2013, NPL data are based on BSP Circular No. 772. Gross NPL represents the actual level of NPL without any adjustment for loans treated as "loss" and fully provisioned.

As a complementary measure to computing gross NPL, banks shall likewise compute their net NPLs, which shall refer to gross NPLs less specific allowance for credit losses on the total loan portfolio,

Under Circular No. 772, there are no available data for Gross NPLs and Net NPLs earlier than 2012.a

As of December 2015p

Preliminaryr

Revised

Details may not add up due to rounding off.


9 RATIO OF NON-PERFORMING LOANS (NPL) AND LOAN LOSS PROVISIONS 1

TO TOTAL LOANS OF THE BANKING SYSTEM

end-of-period, in percent

UBs &KBs TBs RBs Total UBs &KBs TBs RBs Total UBs &KBs TBs RBs Total UBs &KBs TBs RBs Total

2006 5.662 8.220 10.867 6.108 4.679 4.055 4.589 4.611

2007 4.448 6.846 9.820 4.929 4.151 3.235 3.579 4.025

2008 3.524 6.622 9.973 4.061 3.524 3.548 3.792 3.536

2009 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

2012

Mar 3.331 6.481 11.266 3.936 0.593 2.869 6.037 1.020 3.914 4.514 6.215 4.056

Jun 3.013 5.626 11.508 3.569 0.336 2.201 5.886 0.717 3.756 4.219 6.591 3.897

Sep 3.003 6.292 11.492 3.616 0.384 2.762 5.482 0.794 3.734 4.521 6.989 3.920

Dec 2.756 5.905 12.327 3.381 0.310 2.720 5.374 0.720 3.519 4.027 7.948 3.707

2013

Mar 2.741 6.131 13.323 3.423 0.448 2.787 6.235 0.872 3.517 4.317 8.048 3.740

Jun 2.683 5.938 12.358 3.319 0.387 2.628 5.764 0.787 3.491 4.294 7.573 3.698

Sep 2.566 5.888 12.935 3.215 0.421 2.667 6.207 0.825 3.349 4.116 7.682 3.553

Dec 2.126 5.456 13.132 2.768 0.189 2.419 6.260 0.584 3.064 3.957 7.836 3.285

2014

Mar 2.155 4.939 13.137 2.761 0.230 2.400 6.382 0.636 3.044 3.427 7.696 3.214

Jun 2.100 4.826 13.445 2.684 0.276 2.297 6.694 0.658 2.954 3.391 7.706 3.122

Sep 2.044 4.524 12.240 2.561 0.300 2.010 6.134 0.627 2.842 3.365 7.047 3.002

Dec 1.818 4.405 11.848 2.312 0.299 1.970 5.854 0.596 2.590 3.380 6.908 2.770

2015p

Mar 1.950 4.541 12.044 2.467 0.362 2.016 6.042 0.674 2.695 3.404 6.932 2.872

Jun 1.842 4.694 11.900 2.357 0.300 2.216 5.427 0.613 2.640 3.362 7.439 2.817

Oct 1.816 4.563 11.528 2.316 0.343 2.139 4.940 0.635 2.538 3.297 7.574 2.723

Dec 1.601 4.528 11.546 2.091 0.379 2.132 4.644 0.642 2.259 3.345 7.902 2.476

2016p

Mar 1.716 4.716 11.546a

2.231 0.514 2.237 4.644a

0.782 2.283 3.433 7.902a

2.514

1Data include banks under liquidation, foreign office transactions and interbank loans

2Starting Sept. 2002, for supervisory purposes, computation of NPL was based on BSP Circular No. 351 which defines total loans as gross of allowance for probable losses and interbank loans less loans classified as loss. This has been discontinued in 2013.

For comparability purposes, 2012 was revised based on the new definition (BSP Circular No. 772). 3

Starting January 2013, NPL data are based on BSP Circular No. 772. Gross NPL represents the actual level of NPL without any adjustment for loans treated as "loss" and fully provisioned.

As a complementary measure to computing gross NPL, banks shall likewise compute their net NPLs, which shall refer to gross NPLs less specific allowance for credit losses on the total loan portfolio,

Under Circular No. 772, there are no available data for Gross NPLs and Net NPLs earlier than 2012.a

As of December 2015p

Preliminaryr

Revised

Details may not add up due to rounding off.


Loan Loss Provisions/Total Loans NPL/Total Loans 2

Gross NPL/Total Loans 3

Net NPL/Total Loans 3

10 STOCK MARKET TRANSACTIONS

volume in million shares, value in million pesos

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Volume 165,036 170,243 106,453 73,403 113,135 122,113 155,537 424,409 150,587 68,804 191,792 82,078 97,625

Financials 1,816 1,374 986 3,439 992 1,341 1,558 1,090 978 1,238 1,154 725 741

Industrial 18,622 35,931 15,350 10,863 12,328 13,115 13,644 25,346 10,913 6,133 11,872 5,550 6,153

Holding Firms 33,659 36,290 5,254 5,250 5,728 6,984 12,527 12,142 10,844 6,076 25,300 13,115 8,600

Property 22,018 16,991 19,350 10,129 12,053 22,136 20,366 15,629 12,138 8,586 7,757 16,680 10,446

Services 23,394 21,728 10,167 13,676 7,058 12,923 17,377 32,885 21,263 9,370 8,628 10,202 17,038

Mining & Oil 65,527 57,929 55,346 30,043 74,975 64,492 89,992 336,889 94,056 37,160 136,929 35,490 54,421

SME (in thousand shares) 322 232 285 302 317 1,120,339 71,577 421,612 393,244 239,362 149,843 315,570 222,462

ETF1/

(in thousand shares) 1,196 426 668 791 4,748 1,893 2,235 1,715 1,220 2,964

Value 623,382 781,005 587,512 554,284 457,085 535,924 548,203 588,908 641,594 553,577 517,832 438,408 407,066

Financials 101,570 98,628 77,285 64,828 65,888 73,681 69,826 68,898 74,595 88,404 66,529 43,993 51,044

Industrial 125,879 228,624 144,382 185,203 104,206 110,557 94,254 119,148 145,948 143,103 150,323 91,553 90,691

Holding Firms 167,320 187,192 135,005 116,194 121,554 120,483 131,683 126,267 174,325 136,336 108,947 119,313 98,158

Property 108,596 100,356 139,774 60,423 67,867 105,044 79,090 108,390 103,447 75,621 77,548 104,550 74,676

Services 91,228 150,765 81,066 119,723 83,835 96,404 143,589 137,725 111,491 85,432 94,494 67,320 74,501

Mining & Oil 28,786 15,438 9,997 7,791 13,688 22,756 29,113 24,360 27,328 21,899 17,914 8,583 15,738

SME (in thousand pesos) 2,677 1,354 3,633 3,452 5,312 6,927,918 557,346 3,581,718 4,226,414 2,498,500 1,876,456 2,957,202 1,927,800

ETF1/

(in thousand pesos) 118,184 42,130 72,183 90,521 539,579 234,748 282,800 200,392 139,155 331,093

Composite Index (end of period) 6847.47 6465.28 6191.80 5889.83 6428.71 6844.31 7283.07 7230.57 7940.49 7564.50 6893.98 6952.08 7262.30

Sum of details may not add up to totals due to rounding.

1/ Starting 2 December 2013, trading of an Exchange Traded Fund commenced. ETF is an open-end investment company that trades its shares in the stock exchange

Source : Philippine Stock Exchange

20162013 2014 2015

11 PHILIPPINES: BALANCE OF PAYMENTS

in million U.S. dollars

Growth (%)

Q1 Q2 Q3 Q4 Q1 Q1 2016 p

Current Account 2165 2308 104 3819 447 -79.4

(Totals as percent of GNI) 2.6 2.6 0.1 4.0 0.5 ...

(Totals as percent of GDP) 3.2 3.1 0.1 4.8 0.6 ...

Export 25495 26057 26546 27189 25646 0.6

Import 23330 23749 26442 23370 25199 8.0

Goods, Services, and Primary Income -3577 -3643 -5811 -2093 -5934 -65.9

Export 19567 19867 20463 21043 19085 -2.5

Import 23144 23511 26273 23136 25019 8.1

Goods and Services -3842 -4251 -5963 -3399 -6513 -69.5

(Totals as percent of GNI) -4.6 -4.7 -7.1 -3.6 -7.7 ...

(Totals as percent of GDP) -5.6 -5.7 -8.6 -4.2 -9.4 ...

Export 17284 17555 18042 18563 16702 -3.4

Import 21126 21806 24005 21962 23215 9.9

Goods -4799 -4429 -7069 -5401 -8010 -66.9

(Totals as percent of GNI) -5.8 -4.9 -8.4 -5.6 -9.5 ...

(Totals as percent of GDP) -7.0 -6.0 -10.2 -6.7 -11.6 ...

Credit: Exports 10494 10657 10993 11132 9241 -11.9

Debit: Imports 15293 15087 18062 16532 17250 12.8

Services 957 178 1106 2002 1496 56.4

Credit: Exports 6790 6898 7048 7431 7461 9.9

Debit: Imports 5833 6719 5942 5429 5965 2.3

Primary Income 265 608 152 1306 579 118.6

Credit: Receipts 2283 2312 2421 2480 2383 4.4

Debit: Payments 2018 1705 2269 1174 1804 -10.6

Secondary Income 5743 5952 5914 5912 6381 11.1

Credit: Receipts 5928 6190 6083 6146 6561 10.7

Debit: Payments 186 238 169 235 180 -3.0

Capital Account 17 21 21 23 25 50.2

Credit: Receipts 24 25 24 25 28 19.9

Debit: Payments 7 4 2 2 3 -53.7

Financial Account 152 1258 -291 1404 959 530.8

Net Acquisition of Financial Assets -37 1470 2268 2974 2728 7570.1

Net Incurrence of Liabilities -188 212 2559 1570 1769 1038.3

Direct Investment 358 -476 -11 7 -923 -357.7

Net Acquisition of Financial Assets 1209 712 2486 1195 370 -69.4

Net Incurrence of Liabilities 850 1188 2498 1188 1293 52.1

Portfolio Investment -459 3375 2202 -361 522 213.7

Net Acquisition of Financial Assets 873 1127 723 -107 1084 24.2

Net Incurrence of Liabilities 1332 -2248 -1479 254 563 -57.8

Financial Derivatives 2 -31 19 -22 9 427.9

Net Acquisition of Financial Assets -133 -155 -103 -74 -73 44.9

Net Incurrence of Liabilities -135 -124 -122 -52 -82 38.8

Other Investment 251 -1609 -2500 1780 1351 438.4

Net Acquisition of Financial Assets -1985 -213 -838 1960 1347 167.8

Net Incurrence of Liabilities -2236 1396 1663 180 -5 99.8

NET UNCLASSIFIED ITEMS -1153 -264 -292 -1628 277 124.0

OVERALL BOP POSITION 877 807 124 809 -210 -123.9

(Totals as percent of GNI) 1.1 0.9 0.1 0.8 -0.2 ...

(Totals as percent of GDP) 1.3 1.1 0.2 1.0 -0.3 ...

Debit: Change in Reserve Assets 888 796 135 798 -199 -122.4

Credit: Change in Reserve Liabilities 11 -11 11 -11 11 0.1

Details may not add up to total due to rounding.

p Preliminary

... Blank

Technical Notes:

1. Balance of Payments Statistics are based on the IMF's Balance of Payments and International Investment Position Manual, 6th Edition.

2. Financial Account, including Reserve Assets, is calculated as 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).


2015 2016 p

12 INTERNATIONAL RESERVES


in million US dollars

Mar Jun Sep Dec Mar

Gross International Reserves 80,459 80,644 80,551 80,667 82,977

Gold 7,437 7,378 7,015 6,703 7,765

SDRs 1,168 1,190 1,188 1,173 1,193

Foreign Investments 70,565 70,647 70,800 71,739 71,379

Foreign Exchange 850 985 1,103 613 2,217

Reserve Position in the Fund 439 445 445 439 424

Net International Reserves 80,446 80,642 80,538 80,665 82,964

Details may not add up to total due to rounding


2 0 1 5 2 0 1 6

13 EXCHANGE RATES OF THE PESOpesos per unit of foreign currencyperiod averages

2013 42.4462 0.4356 56.3942 66.4139 41.0195 33.9347 5.4725 13.4839 1.3832 0.0041 1.4305 0.0388 6.9048 11.3184 11.5567Jan 40.7295 0.4580 54.1270 65.0893 42.7556 33.1823 5.2537 13.4143 1.3549 0.0042 1.4011 0.0382 6.5456 10.8608 11.0893

Feb 40.6723 0.4372 54.3618 63.0701 41.9596 32.8469 5.2446 13.1338 1.3647 0.0042 1.3727 0.0374 6.5255 10.8455 11.0736Mar 40.7127 0.4293 52.8776 61.3734 41.9971 32.6803 5.2477 13.0966 1.3788 0.0042 1.3700 0.0370 6.5492 10.8564 11.0848Apr 41.1422 0.4221 53.5266 62.9378 42.7442 33.2313 5.2999 13.4866 1.4164 0.0042 1.3793 0.0367 6.6485 10.9711 11.2020May 41.2976 0.4092 53.5926 63.1389 40.9360 33.0769 5.3210 13.6880 1.3898 0.0042 1.3870 0.0372 6.7247 11.0124 11.2440Jun 42.9069 0.4406 56.6122 66.4568 40.5481 34.0634 5.5291 13.6649 1.3959 0.0044 1.4334 0.0378 6.9941 11.4413 11.6823Jul 43.3559 0.4350 56.7089 65.8438 39.7304 34.2142 5.5896 13.6030 1.3950 0.0043 1.4482 0.0385 7.0675 11.5609 11.8044Aug 43.8639 0.4484 58.4174 67.8155 39.5530 34.4837 5.6559 13.3993 1.3899 0.0042 1.4640 0.0393 7.1644 11.6961 11.9425Sep 43.8318 0.4420 58.5044 69.4375 40.6011 34.6960 5.6527 13.4795 1.3821 0.0039 1.4785 0.0404 7.1617 11.6874 11.9338Oct 43.1825 0.4415 58.8668 69.5227 41.0612 34.7164 5.5693 13.5813 1.3850 0.0038 1.4696 0.0405 7.0723 11.5148 11.7573Nov 43.5546 0.4357 58.7584 70.1141 40.6381 34.9239 5.6184 13.6441 1.3786 0.0038 1.4758 0.0410 7.1480 11.6137 11.8586Dec 44.1043 0.4276 60.3768 72.1669 39.7100 35.1010 5.6885 13.6152 1.3677 0.0037 1.4864 0.0418 7.2565 11.7602 12.0081

2014 44.3952 0.4208 59.0432 73.1731 40.0974 35.0648 5.7252 13.5828 1.3672 0.0037 1.4659 0.0422 7.2076 11.8363 12.0872Jan 44.9266 0.4321 61.2469 74.0269 39.8717 35.3263 5.7920 13.6219 1.3657 0.0037 1.4918 0.0422 7.4251 11.9795 12.2323

Feb 44.8950 0.4397 61.3016 74.3135 40.2635 35.4679 5.7867 13.5655 1.3756 0.0038 1.4817 0.0419 7.3893 11.9711 12.2238Mar 44.7916 0.4381 61.9409 74.4520 40.6363 35.3400 5.7711 13.6530 1.3832 0.0039 1.4738 0.0419 7.2601 11.9437 12.1953Apr 44.6416 0.4351 61.6350 74.6995 41.6028 35.5664 5.7572 13.7098 1.3815 0.0039 1.4773 0.0428 7.1717 11.9035 12.1542May 43.9236 0.4314 60.3484 73.9965 40.8495 35.1096 5.6660 13.6035 1.3513 0.0038 1.4582 0.0429 7.0410 11.7116 11.9588Jun 43.8175 0.4293 59.5975 74.0822 41.0022 35.0303 5.6528 13.6158 1.3474 0.0037 1.4609 0.0430 7.0296 11.6829 11.9300Jul 43.4665 0.4276 58.9257 74.2780 40.8363 34.9877 5.6085 13.6594 1.3531 0.0037 1.4523 0.0426 7.0096 11.5901 11.8342Aug 43.7673 0.4258 58.3659 73.2141 40.7390 35.0739 5.6473 13.7637 1.3663 0.0038 1.4599 0.0427 7.1085 11.6701 11.9160Sep 44.0751 0.4119 56.9349 71.9350 40.0406 34.9299 5.6860 13.7383 1.3708 0.0037 1.4653 0.0427 7.1795 11.7517 12.0001Oct 44.7979 0.4156 56.8661 72.0912 39.3383 35.1776 5.7746 13.7129 1.3812 0.0037 1.4743 0.0423 7.3101 11.9421 12.1967Nov 44.9514 0.3875 56.1001 70.9959 38.9172 34.7182 5.7970 13.4555 1.3717 0.0037 1.4646 0.0411 7.3394 11.9815 12.2384Dec 44.6878 0.3755 55.2554 69.9919 37.0710 34.0494 5.7632 12.8943 1.3589 0.0036 1.4306 0.0405 7.2276 11.9074 12.1666

2015 45.5028 0.3760 50.5291 69.5888 34.2412 33.1266 5.8697 11.7236 1.3308 0.0034 1.4340 0.0403 7.2423 12.1317 12.3892Jan 44.6044 0.3764 51.8185 67.5228 36.1260 33.3326 5.7531 12.4698 1.3627 0.0035 1.4109 0.0410 7.1705 11.8776 12.1439Feb 44.2214 0.3728 50.2159 67.7105 34.4404 32.6549 5.7028 12.2812 1.3575 0.0035 1.4017 0.0402 7.0756 11.7850 12.0397Mar 44.4457 0.3695 48.2323 66.6675 34.4120 32.3068 5.7290 12.1122 1.3638 0.0034 1.4139 0.0400 7.1198 11.8512 12.1011Apr 44.4136 0.3717 47.9446 66.4142 34.3952 32.9291 5.7303 12.2206 1.3660 0.0034 1.4340 0.0409 7.1605 11.8431 12.0921May 44.6106 0.3697 49.8209 68.9978 35.2446 33.4497 5.7545 12.4089 1.3334 0.0034 1.4578 0.0409 7.1904 11.8964 12.1456Jun 44.9831 0.3635 50.4958 70.0355 34.6977 33.4578 5.8023 12.0537 1.3345 0.0034 1.4560 0.0404 7.2488 11.9957 12.2476Jul 45.2649 0.3674 49.8437 70.4481 33.6277 33.2927 5.8396 11.9158 1.3212 0.0034 1.4535 0.0396 7.2911 12.0702 12.3242Aug 46.1420 0.3746 51.3555 71.9861 33.7471 33.0760 5.9513 11.4516 1.3053 0.0034 1.4373 0.0393 7.2960 12.3033 12.5633Sep 46.7504 0.3891 52.5457 71.7659 33.0060 33.0510 6.0323 10.8822 1.2991 0.0033 1.4330 0.0395 7.3395 12.4684 12.7301Oct 46.3609 0.3860 52.0504 71.0269 33.4019 33.0814 5.9821 10.8995 1.2978 0.0034 1.4287 0.0405 7.2971 12.3660 12.6235Nov 47.0067 0.3844 50.6537 71.5190 33.5722 33.3169 6.0650 10.9313 1.3159 0.0034 1.4422 0.0409 7.3878 12.5325 12.7995Dec 47.2303 0.3874 51.3725 70.9713 34.2240 33.5709 6.0936 11.0560 1.3129 0.0034 1.4392 0.0403 7.3302 12.5910 12.8606

2016 47.2904 0.4099 52.1602 67.7775 34.0756 33.6929 6.0823 11.2646 1.3255 0.0035 1.4296 0.0394 7.2283 12.6109 12.8766Jan 47.5111 0.4021 51.6548 68.4806 33.3269 33.1651 6.1066 10.9323 1.3139 0.0034 1.4228 0.0395 7.2323 12.6654 12.9370Feb 47.6361 0.4141 52.9010 68.3006 33.9669 33.9074 6.1201 11.4192 1.3378 0.0035 1.4337 0.0393 7.2749 12.7053 12.9705Mar 46.7240 0.4135 51.9247 66.5513 34.9329 34.0062 6.0204 11.4424 1.3248 0.0036 1.4323 0.0394 7.1776 12.4619 12.7224


Emirati Dirham

Thai BahtUS DollarJapanese

YenEuro

Pound Sterling

New Taiwan Dollar

South Korean Won

Indonesian Rupiah

Chinese Yuan

Saudi RialSingapore

DollarHongkong

DollarMalaysian

RinggitAustralian

Dollar

13a EXCHANGE RATES OF THE PESOunits of foreign currency per pesoperiod averages




2016 0.0211 2.4399 0.0192 0.0148 0.0294 0.0297 0.1644 0.0888 0.7545 286.2564 0.6995 25.3918 0.1384 0.0793 0.0777Jan 0.0210 2.4867 0.0194 0.0146 0.0300 0.0302 0.1638 0.0915 0.7611 293.6858 0.7029 25.2972 0.1383 0.0790 0.0773Feb 0.0210 2.4147 0.0189 0.0146 0.0294 0.0295 0.1634 0.0876 0.7475 283.5821 0.6975 25.4760 0.1375 0.0787 0.0771Mar 0.0214 2.4183 0.0193 0.0150 0.0286 0.0294 0.1661 0.0874 0.7548 281.5013 0.6982 25.4022 0.1393 0.0802 0.0786


Saudi RialEmirati Dirham

Australian Dollar

Chinese Yuan

South Korean Won

Malaysian Ringgit

Thailand Baht

Indonesian Rupiah

New Taiwan Dollar

Pound Sterling

Singapore Dollar

Hongkong Dollar

EuroUS DollarJapanese

Yen

13b EFFECTIVE EXCHANGE RATE INDICES OF THE PESO1980 = 100period averages

Overall 1 Advanced 2 Developing 3 Overall Advanced Developing

2013 15.26 12.38 24.45 87.44 81.57 115.85Jan 15.53 12.43 25.14 91.17 84.88 120.98Feb 15.72 12.65 25.35 90.71 84.77 120.01Mar 15.82 12.82 25.37 90.76 84.87 120.03Apr 15.71 12.81 25.07 90.41 84.80 119.30May 15.75 12.96 24.97 90.39 85.15 118.89Jun 15.14 12.27 24.27 87.15 80.87 115.93Jul 15.08 12.29 24.09 85.75 80.37 113.22Aug 14.88 12.02 23.92 84.33 78.11 112.32Sep 14.89 12.07 23.89 84.35 78.23 112.25Oct 14.97 12.11 24.04 85.06 78.90 113.18Nov 14.94 12.15 23.90 85.09 79.45 112.66Dec 14.85 12.10 23.72 84.84 79.26 112.29



2016 15.32 12.63 24.27 91.69 89.11 117.95Jan 15.43 12.75 24.40 93.88 91.57 120.45Feb 15.20 12.50 24.13 90.56 88.02 116.48Mar 15.33 12.63 24.28 90.63 87.74 116.92

2 U.S., Japan, Euro Area, and Australia3 Hong Kong, Taiwan, Thailand, Indonesia, Malaysia, Singapore, South Korea, China, Saudi Arabia, and U.A.E.r Revised using actual inflation rates


Trading Partners Index Trading Partners Index

1 Australia, Euro Area, U.S., Japan, Hong Kong, Taiwan, Thailand, Indonesia, Malaysia, Singapore, South Korea, China, Saudi Arabia, and U.A.E.

N O M I N A L R E A L

14 TOTAL EXTERNAL DEBT 1/



Medium & Medium &

Trade Non-Trade Long- Term Trade Non-Trade Long- Term

Grand Total 2,203 12,896 62,375 77,474a

2,469 11,844 63,326 77,640a

Public Sector 0 899 37,374b

38,273 0 485 38,442b

38,927

Banks 0 899 3,206 4,105 0 485 3,290 3,776

Bangko Sentral ng Pilipinas 0 0 1,337c

1,337 0 0 1,351c

1,351

Others 0 899 1,870 2,768 0 485 1,939 2,425

Non-Banks 0 0 34,168 34,168 0 0 35,152 35,152

CB-BOL 0 0 0 0 0 0 0 0

NG and Others 0 0 34,168 34,168 0 0 35,152 35,152

Private Sector 2,203 11,998 25,001 39,201 2,469 11,359 24,885 38,713

Banks 0 11,392 3,365 14,756 0 10,756 3,211 13,967

Foreign Bank Branches 0 4,542 270 4,812d

0 5,276 206 5,482d

Domestic Banks 0 6,850 3,095 9,944 0 5,480 3,006 8,486

Non-Banks 2,203 606 21,636e

24,445 2,469 602 21,674e

24,745

1Covers debt owed to non-residents, with classification by borrower based on primary obligor per covering loan/rescheduling agreement/document.

Exclusions

aResidents' holdings of Philippine debt papers issued offshore;

Non-residents' holdings of peso-denominated debt securities

Inclusions

bCumulative foreign exchange revaluation on US$-denominated

multi-currency loans from Asian Development Bank and World Bankc

Accumulated SDR allocations from the IMFd

"Due to Head Office/Branches Abroad" (DTHOBA) accounts of branches

and offshore banking units of foreign banks operating in the Philippines

which are considered by BSP as "quasi-equity"e

Loans without BSP approval/registration which cannot be serviced

using foreign exchange from the banking system;

Obligations under capital lease arrangements


14,306

1,390

14,522

1,310

3,550 4,211

-52 -31

1,165 1,179

31 December2015 31 March 2016

TotalShort-termShort-term

Total

31 December2015 31 March 2016

17,376

5,213

17,152

4,870

15 SELECTED FOREIGN DEBT SERVICE INDICATORS



Q1 Q2 Q3 Q4 Q1

Debt Service Burden (DSB) 1 1734 1246 1184 1105 2235

Principal 989 698 493 561 1538

Interest 745 549 691 544 697

Export Shipments (XS) 2 10494 10657 10993 11132 9241

Exports of Goods and Receipts 23954 24433 24934 25577 23619

from Services and Income (XGSI) 2, 3

Current Account Receipts (CAR) 2 25495 26057 26546 27189 25646

External Debt 75319 74998 75607 77474 77640

Gross Domestic Product (GDP) 68367 74271 69147 80402 69103

Gross National Income (GNI) 83304 89518 84312 96333 84483

Ratios (%) :

DSB to XS 16.52 11.69 10.77 9.93 24.18

DSB to XGSI 7.24 5.10 4.75 4.32 9.46

DSB to CAR 6.80 4.78 4.46 4.07 8.71

DSB to GNI 2.08 1.39 1.40 1.15 2.65

External Debt to GDP 26.06 25.68 25.94 26.49 26.51

External Debt to GNI 21.58 21.28 21.48 21.90 21.89

1 Debt 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 Based on the accounting principle under the Balance of Payments and International Investment Position Manual, Sixth edition (BPM6)3 Includes cash remittances of overseas Filipino workers that were coursed through and reported by commercial banks which are reflected

under Compensation of Employees in the Primary Income account and workers' remittances in the Secondary Income account.p/ Preliminary

Source: BSP

2015 p 2016 p

16 SELECTED FOREIGN INTEREST RATESperiod averages; in percent

2016 Q1 Q2 Q3 Q4 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 3.2500 3.2500 3.2841 3.5000

US Discount Rate 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7935 1.0000

US Federal Funds Rate 0.1142 0.1649 0.1570 0.1722 0.1546 0.1140 0.0848 0.0802 0.0767 0.0780 0.0784 0.0930 0.0974 0.1151 0.1323 0.1574 0.3694

LIBOR (90 days) 0.5141 0.4663 0.4239 0.3170 0.2917 0.2750 0.2614 0.2413 0.2358 0.2282 0.2343 0.2363 0.2603 0.2794 0.3142 0.4085 0.6248

SIBOR (90 days)1 0.4375 0.4375 0.4120 0.4063 0.4063 0.4063 0.4063 0.4062 0.4033 0.4038 0.4055 0.4254 0.7503 0.8791 0.9613 1.0921 1.2369

1 SIBOR data refers to SIBOR rates (in Singapore $)

Source: Bloomberg, Asian Wall Street Journal, Reuters

2014 2013 2015 2012

17 BALANCE SHEET OF THE BANGKO SENTRAL NG PILIPINASas of periods indicatedin billion pesos

Mar Jun Sep Dec Mar Jun Sep Dec p,u Mar t

Assets 4,040.9 4,028.2 4,062.2 4,087.5 4,134.4 4,180.5 4,296.4 4,309.6 4,403.7

4,040.9 4,028.2 4,062.2 4,087.5 4,134.4 4,180.5 4,296.4 4,309.6 International Reserves 3,545.2 3,500.3 3,547.2 3,535.8 3,581.1 3,622.1 3,753.7 3,782.4 3,798.6 Domestic Securities 219.0 222.0 222.0 222.4 223.0 223.1 223.4 222.6 224.0 Loans and Advances 85.6 85.2 85.0 85.3 85.1 85.3 85.7 85.5 163.5 Revaluation of International Reserves 0.0 26.1 7.5 41.7 35.9 36.7 0.0 0.0 0.0 Bank Premises and Other Fixed Assets 17.7 17.8 18.1 18.1 18.0 17.9 18.0 18.3 18.1 Derivative Instruments in a Gain/Loss (-) Position 0.0 -0.1 0.7 0.1 1.3 0.4 0.2 -0.1 -1.8 Other Assets 173.3 177.0 181.8 184.1 190.0 194.9 215.6 200.9 201.3

Liabilities 3,985.3 3,973.5 4,013.3 4,043.2 4,092.5 4,137.3 4,253.9 4,268.9 4,361.0

Currency Issue 708.0 705.0 714.5 929.5 809.7 798.6 817.3 1,005.2 930.5 Deposits 2,855.2 2,883.2 2,909.4 2,724.6 2,893.1 2,945.9 2,952.6 2,788.9 2,935.7 Reserve Deposits of Other Depository Corporations (ODCs) 1

1,116.4 1,251.3 1,285.5 1,386.7 1,277.7 1,324.4 1,373.3 1,456.2 1,427.0 Reserve Deposits of Other Financial Corporations (OFCs) 2 0.5 3.2 4.1 7.7 7.6 7.1 6.8 5.7 4.0 Special Deposit Accounts 3 1,332.4 1,163.0 1,066.3 845.0 1,052.2 1,008.1 953.7 828.3 1,027.5 Treasurer of the Philippines 4 333.6 390.1 476.7 415.2 478.6 528.0 544.1 426.8 336.3

Other Foreign Currency Deposits 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5

Foreign Financial Institutions 35.5 39.7 39.5 39.5 43.7 44.4 39.3 39.3 108.7 Other Deposits 5 36.9 35.8 37.4 30.4 33.4 33.9 35.3 32.5 31.7

Foreign Loans Payable 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0

Net Bonds Payable 22.9 21.8 22.9 22.4 22.8 22.6 23.9 23.6 23.5

Derivative Instruments in a Loss Position 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Derivatives Liability 0.0 0.1 0.0 0.0 0.1 0.0 0.0 0.0 0.0

Allocation of SDRs 58.0 56.5 55.8 54.3 51.7 53.2 55.1 54.7 54.3

Revaluation of International Reserves 33.6 0.0 0.0 0.0 0.0 0.0 86.2 73.9 96.2 Reverse Repurchase Agreements 3 296.5 296.3 299.1 302.3 304.8 306.3 308.5 311.7 309.8

Other Liabilities 10.9 10.5 11.5 10.0 10.2 10.8 10.1 10.8 10.9

Net Worth 55.6 54.7 48.9 44.4 41.9 43.2 42.5 40.8 42.6

Capital 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0

Surplus/Reserves 5.6 4.7 -1.1 -5.6 -8.1 -6.8 -7.5 -9.2 -7.4

Note: Details may not add up to total due to rounding off.1 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.p,u Preliminary and unaudited based on core Financial Accounting System (cFAS) Production Environment.t Tentative and subject to change based on cFAS Development Environment.


20162014 2015

18 INCOME POSITION OF THE BANGKO SENTRAL NG PILIPINAS

1 20162 Q1 Q2 1 Q3 1 Q4 FY Q1 Q2 1 Q3 1 Q4 p,u FY p,u Q1 t

Revenues 10.524 12.961 12.690 13.604 49.779 15.299 16.083 11.806 13.559 56.747 13.167

Interest Income 7.656 7.908 8.266 9.173 33.003 8.454 9.735 10.226 10.798 39.213 11.495 International Reserves 5.966 6.045 6.121 6.900 25.032 6.111 7.333 7.639 8.058 29.141 8.824 Domestic Securities 0.297 0.501 0.792 0.856 2.446 0.941 1.021 1.147 1.240 4.349 1.052 Loans and Advances 0.513 0.438 0.426 0.440 1.817 0.424 0.417 0.438 0.424 1.703 0.438 Others 0.880 0.924 0.927 0.977 3.708 0.978 0.964 1.002 1.076 4.020 1.181 Miscellaneous Income 2.724 4.767 4.159 4.312 15.962 6.672 5.584 1.184 2.503 15.943 1.263 Net Income from Branches 0.144 0.286 0.265 0.119 0.814 0.173 0.764 0.396 0.258 1.591 0.409

Expenses 15.097 16.010 19.433 18.327 68.867 17.308 18.538 17.993 18.942 72.781 16.684

Interest Expenses 11.131 10.646 11.982 12.398 46.157 12.022 12.240 12.325 12.015 48.602 11.550 Legal Reserve Deposits of Banks 0.006 0.006 0.002 0.000 0.014 0.000 0.000 0.000 0.000 0.000 0.000 National Government Deposits 1.180 1.383 2.076 2.199 6.838 2.205 2.651 2.614 2.544 10.014 1.828 BSP Debt Instruments 2.605 2.619 2.761 3.073 11.058 3.033 3.083 3.140 3.133 12.389 3.148 Special Deposit Accounts 6.932 6.149 6.637 6.528 26.246 6.291 6.003 6.233 5.803 24.330 6.064 Loans Payable and Other Foreign Currency Deposits 0.505 0.474 0.494 0.482 1.955 0.487 0.494 0.326 0.519 1.826 0.500 Other Liabilities -0.097 0.015 0.012 0.116 0.046 0.006 0.009 0.012 0.016 0.043 0.010 Cost of Minting/Printing of Currency 0.924 1.467 1.484 2.888 6.763 1.940 1.711 1.585 2.949 8.185 1.284 Taxes and Licenses 0.241 0.170 1.959 -1.359 1.011 0.355 0.225 0.252 0.282 1.114 0.364 Others 2.801 3.727 4.008 4.400 14.936 2.991 4.362 3.831 3.696 14.880 3.486

Net Income/(Loss) Before Gain/(Loss) on FXR Fluctuations and Income Tax Expense/(Benefit) -4.573 -3.049 -6.743 -4.723 -19.088 -2.009 -2.455 -6.187 -5.383 -16.034 -3.517

Gain/(Loss) on Foreign Exchange Rate Fluctuations 1 8.978 -0.741 0.852 -0.153 8.936 -1.176 3.496 5.333 3.897 11.550 3.673

Income Tax Expense/(Benefit) 0.000 0.000 0.000 -0.037 -0.037 0.000 0.000 0.002 -0.183 -0.181 0.000

Net Income/(Loss) After Tax 4.405 -3.790 -5.891 -4.839 -10.115 -3.185 1.041 -0.856 -1.303 -4.303 0.156

Note: Details may not add up to total due to rounding off.1

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.

p,uPreliminary and unaudited based on core Financial Accounting System (cFAS) Production Environment.

tTentative and subject to change based on cFAS Development Environment.


for periods indicatedin billion pesos

20152014

first quarter 2016 report on economic and financial developments

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