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Report on Economic and Financial Developments

EXECUTIVE SUMMARY 1

A. REAL SECTOR

AGGREGATE SUPPLY AND DEMAND 10

LABOR AND EMPLOYMENT 15

B. FISCAL SECTOR

NATIONAL GOVERNMENT CASH OPERATIONS 17

C. MONETARY SECTOR

PRICES 18

DOMESTIC LIQUIDITY 22

DOMESTIC INTEREST RATES 23

MONETARY POLICY DEVELOPMENTS 25

D. FINANCIAL SECTOR

BANKING SYSTEM 26

BANKING POLICIES 35

CAPITAL MARKET REFORMS 36

STOCK MARKET 36

BOND MARKET 39

CREDIT RISK ASSESSMENT 43

PAYMENTS AND SETTLEMENTS SYSTEM 46

E. EXTERNAL SECTOR

BALANCE OF PAYMENTS 47

INTERNATIONAL RESERVES 54

EXCHANGE RATE 55

EXTERNAL DEBT 58

FOREIGN INTEREST RATES 60

GLOBAL ECONOMIC DEVELOPMENTS 62

F. FINANCIAL CONDITION OF THE BSP

BALANCE SHEET 65

INCOME STATEMENT 67

G. CHALLENGES AND FUTURE POLICY DIRECTIONS 68

ANNEXES 73

STATISTICAL TABLES

Bangko Sentral ng Pilipinas | 1


First Quarter 2015

EXECUTIVE SUMMARY

A. Key Economic Developments

The Philippine economy sustained a positive,

albeit more moderate, growth of 5.2 percent

in Q1 2015. This was lower than the

quarter-ago and year-ago expansion rates of

6.6 percent and 5.6 percent, respectively.

The more moderate growth during the review

period was attributed to the

slower-than-programmed pace of

government spending and the slowdown in

exports. Nevertheless, broad-based

expansion was observed across various

sectors of the economy.

The lower-than-expected growth was

accompanied by a further easing in headline

inflation, which averaged 2.4 percent in

Q1 2015. At this rate, inflation remained

within the Government’s target range of

2-4 percent for 2015. Lower food inflation,

due to ample domestic supply, as well as

non-food inflation, owing to the drop in oil

prices, resulted in easing price pressures.

Official core inflation likewise decreased

further to 2.5 percent during the quarter in

review.

Meanwhile, domestic liquidity continued to

grow in Q1 2015 albeit at a slower rate than

in the previous quarter. The increase in

money supply was driven largely by sustained

expansion in credits extended to the private

sector. This is consistent with the double-digit

growth in bank lending channeled mainly to

the productive sectors of the economy.

Against this backdrop, the BSP decided to

maintain key policy interest rates during the

review quarter. The interest rates on term

RRPs, RPs, and SDAs were also kept steady

while the reserve requirement ratios were

left unchanged as well. The Monetary Board’s

(MB) decisions during the quarter were based

on the assessment that the inflation

environment continued to be manageable.

At the same time, the MB noted that the risk

to the inflation outlook was still seen as being

broadly balanced.

The cash operations of the National

Government (NG) yielded a lower deficit of

P33.5 billion in Q1 2015, in contrast to the

P98.1-billion programmed deficit for the

review quarter. Government expenditures

rose in Q1 2015, due mainly to the increased

allotment to local government units (LGUs).

Nonetheless, actual spending continued to be

below program levels.



First Quarter 2015

Domestic financial market conditions

remained favorable in Q1 2015. This reflected

the positive global developments, as well as

upbeat investor sentiment on domestic

prospects. For example, the Philippine Stock

Exchange index (PSEi) averaged higher by

24.0 percent, year-on-year (y-o-y), from

Q1 2014. Meanwhile, the peso also

appreciated, buoyed by the prevailing

accommodative monetary policy stance in

major economies.

The Philippine banking system continued to

perform strongly, supported by sustained

economic expansion. Bank’ assets and

deposits continued to grow while asset

quality indicators have remained well below

pre-Asian crisis levels. Meanwhile, capital

adequacy ratios were kept above

international standards, even with the

implementation of the tighter Basel 3

framework.

The healthy external payments position

remains a source of strength for the

economy. The country’s balance of payments

(BOP) position reversed to a surplus of

US$0.9 billion from the deficit a year ago. The

surplus stemmed from robust inflows in the

current account and the marked decline in

net outflows (or net lending by residents to

the rest of the world) in the financial account.

Consequently, the gross international

reserves (GIR) rose anew to US$80.5 billion as

of end-March 2015, higher by US$1.0 billion

relative to the previous quarter’s level.

The increase was due mainly to the NG’s net

foreign currency deposits and the BSP’s

foreign exchange (FX) operations and income

from investments abroad.

The Philippine economy continued to

expand, albeit at a slower pace. Real gross

domestic product (GDP) expanded by

5.2 percent y-o-y in Q1 2015. Growth was

recorded in all economic sectors although at

slower rates than in the previous quarter. The

lower-than-programmed pace in government

spending as well as the softening in exports

dampened GDP growth for the review period.

By contrast, capital formation recorded

double-digit expansion, supported by

increases in durable equipment and

intellectual property products as well as

sustained growth in construction.

Employment conditions improve. Results of

the January 2015 Labor Force Survey (LFS) of

the Philippine Statistics Authority (PSA)

reported a decline in the unemployment rate

to 6.6 percent in Q1 2015 from 7.5 percent in

the same quarter a year ago.

Employment increased by 2.8 percent y-o-y to

37.5 million, led by services which generated



First Quarter 2015

the highest number of new jobs. The ratio of

the underemployed to total employed

persons likewise went down to 17.5 percent

in Q1 2015 from 19.5 percent in the same

period last year.

NG cash operations yield lower deficit. The

cash operations of the NG yielded a lower

deficit of P33.5 billion in Q1 2015 compared

to the quarter- and year-ago figures of

P42.0 billion and P84.1 billion, respectively.

The Q1 2015 fiscal deficit fell below the

P98.1-billion programmed deficit for the

review quarter, reflecting continued

underspending of the NG. Total revenues

increased by 18 percent y-o-y to reach

P470.5 billion but fell 3 percent below the

target collection for the review quarter.

Meanwhile, despite the 4.5-percent y-o-y

increase in total expenditures, NG spending

remained 13.4 percent lower than the

P582.2-billion programmed expenditure for

the quarter.

Inflation further eases. Headline inflation

eased further to 2.4 percent in Q1 2015 from

the quarter- and year-ago rate of 3.6 percent

and 4.1 percent, respectively. The further

easing was due mainly to food inflation which

fell further to 5.0 percent in Q1 2015 from

6.6 percent in Q4 2014 on ample domestic

supply of all food items, except fruits.

Likewise, non-food inflation decelerated

further to 0.6 percent in Q1 2015 from

1.4 percent in Q4 2014 owing to lower prices

of electricity, gas, and other fuels.

Official core inflation decreased further to

2.5 percent in Q1 2015 from 2.7 percent in

Q4 2014.

Domestic liquidity expands. Money supply

or M3 grew by 8.7 percent y-o-y as of

end-March 2015 to reach P7.6 trillion.

This growth was slower than the 11.2 percent

expansion as of end-December 2014.

The increase in M3 during the review period

was driven by the 10.4-percent expansion in

domestic credits to the economy, with the

sustained growth in bank lending, as well as

the 8.4-percent growth in net foreign assets,

attributed to sustained receipts from

overseas Filipinos’ (OF) remittances and

business process outsourcing (BPO).

The BSP maintains monetary policy rates.

During its monetary policy meetings on

12 February and 26 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. The reserve requirement ratios were



First Quarter 2015

left unchanged as well. The decision to hold

rates steady was based on the assessment

that the inflation environment continued to

be manageable. At the same time, the MB

noted that risks to the inflation outlook

remained broadly balanced.

Domestic interest rates show mixed trends.

Average Treasury bill (T-bill) rates in the

primary market rose across the board in

Q1 2015 due to investor preference for

longer-term debt papers. By contrast,

secondary market yields of government

securities (GS) declined as of end-March 2015

compared to the rates as of end-December

2014, reflecting positive investor sentiment

amid ample market liquidity and expectations

of a benign inflation environment. Other

market interest rates, including the interbank

call loan (IBCL) rate, savings deposit rate, time

deposit rate, and Manila reference rate,

showed mixed trends owing to lower

domestic inflation on the one hand and

uncertainty over the pace of the US monetary

policy normalization on the other.

The Philippine banking system remains

sound and resilient. The Philippine banking

system sustained its robust performance,

supported by the country’s strong

macroeconomic fundamentals and solid

growth prospects. Banks’ balance sheets

continued to grow in y-o-y terms although at

a slower pace than in the previous quarter,

supported by sustained bank lending.

Moreover, capital adequacy ratios (CAR)

remained above international standards, even

with the implementation of the tighter Basel

III framework.

Resources of the banking system increased by

8.9 percent y-o-y as of end-March 2015.

Meanwhile, 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,

at 2.5 percent as of end-March 2015, was

lower than the year-ago ratio of 2.8 percent

but slightly higher than the 2.3 percent

recorded in the previous quarter. Meanwhile,

net NPL ratio rose slightly to 0.7 percent from

0.6 percent in the year- and quarter-ago.

Nevertheless, prudent lending regulations

along with banks’ initiatives to improve their

asset quality kept the GNPL ratio to below its

pre-Asian crisis level of 3.5 percent.

Under the Basel 3 framework, the U/KBs’

industry average CARs at end-2014 stood at

15.2 percent and 16.2 percent on solo and



First Quarter 2015

consolidated basis, respectively. The observed

decline from year-ago ratios was a result of

the revised definition of “bank capital”

applicable to foreign bank branches (FBBs).

Domestic equity prices trend upward. The

PSEi rallied by 24 percent y-o-y to average

7,681.8 index points in Q1 2015.

This reflected positive global developments,

such as the easing monetary stance by major

central banks and the US Fed’s decision to

maintain its policy rates during the quarter,

as well as upbeat investor sentiment

grounded on strong domestic

macroeconomic fundamentals and healthy

corporate earnings.

Debt spreads widen on external

uncertainties. Philippine credit default swap

(CDS) spreads averaged 92.7 bps as of

end-March, slightly higher than the Q4 2014

average of 90.8 bps, indicating a slight rise in

risk aversion toward Philippine debt papers.

Nevertheless, the country’s CDS traded lower

than Indonesia’s average of 154.6 bps,

Malaysia’s 131.3 bps and Thailand’s

108.1 bps. Moreover, the EMBI+Philippine

spreads averaged 128.2 bps, down from the

previous quarter’s 134.9 bps.

The BOP position yields surplus. The BOP

position reversed to a surplus of

US$0.9 billion in Q1 2015, from a deficit of

US$4.5 billion in the previous year. The

surplus in the current account widened,

supported by higher net receipts in the

services, primary and secondary income

accounts and the narrowing of the

trade-in-goods deficit. Meanwhile the

financial account posted a lower net outflow

compared to the previous year as net

outflows in portfolio and other investments

moderated. These were however offset by

the reversal of foreign direct investments to a

net outflow during the review quarter.

International reserves rise anew. The GIR

increased to US$80.5 billion as of

end-March 2015, higher by about US$1 billion

relative to the previous quarter and

US$0.8 billion from the year-ago level.

The end-March level remains adequate to

cover 10.6 months’ worth of imports of goods

and payments of services and income. It is

also equivalent to 6.1 times the country’s

short-term external debt based on original

maturity and 4.6 times based on residual

maturity. The increase in reserves was due

mainly to the NG’s net foreign currency

deposits income from the BSP’s investments

abroad. These inflows were partially offset by

payments for maturing foreign exchange



First Quarter 2015

obligations of the NG and revaluation

adjustments.

External debt declines. The country’s external

debt profile continued to improve.

Outstanding external debt stood at

US$75.3 billion, lower from the year- and

quarter-ago level by 4.6 percent and

3.0 percent, respectively. The decline in debt

levels during the review period was attributed

largely to the US$2.0 billion net repayments,

mainly by banks. In terms of maturity profile,

external debt as of end-March 2015 remained

biased toward medium- and long-term (MLT)

accounts which represented 82.6 percent of

total. This implies that FX requirements for

debt payments are well spread out and, thus,

more manageable. Meanwhile, the external

debt ratio or total outstanding debt (EDT)

expressed as a percentage of annual

aggregate output (GNI), continued to exhibit

an improving trend, declining to 21.5 percent

for the review period from 23.9 percent a

year ago and 22.5 percent last quarter.

The peso strengthens. The peso averaged

P44.42/US$1 in Q1 2015, appreciating by

0.9 percent from the previous quarter’s

average and by 1.0 percent from the

comparable period last year. The peso, along

with other currencies in the region,

strengthened against the US dollar during the

review period on account of further easing

moves of major central banks, particularly,

the European Central Bank’s (ECB’s)

expansion of its asset purchase programme,

and the US Fed’s stance that it can be patient

in normalizing monetary policy, which

boosted the appeal of emerging market

assets. The strengthening of the peso was

also buoyed by the sustained inflows of

foreign exchange from steady OF remittances

and higher foreign portfolio and direct

investment. The country’s ample GIR likewise

supported the stability of the peso.

Global economic conditions remain uneven.

Global economic activity continued to be

characterized by moderate but uneven

growth in most advanced and emerging

economies. Labor market conditions,

nevertheless, showed signs of improvement.

Meanwhile, inflation in advance and

emerging economies generally declined.

The US economy grew at a faster pace of

2.7 percent in Q1 2015 from 2.4 percent in

the previous quarter, reflecting continued

improvements in domestic demand and

investments. Growth in the euro area

increased marginally to 1.0 percent during the

review period, supported by strong economic



First Quarter 2015

performance in several member-countries.

Meanwhile, in Japan, output contracted

further by 1.4 percent in Q1 2015 on account

of the decline in public investment and net

exports.

Among emerging economies in Asia, Hong

Kong, South Korea and China posted a

slowdown in output growth for the review

quarter. Soft external demand weighed down

economic activity in Hong Kong and South

Korea. Meanwhile, growth in China slowed

down to 7.0 percent in Q1 2015, from

7.4 percent in the previous quarter, due to

declines in manufacturing and property

investment. In the ASEAN region, output

growth accelerated in Thailand to 3.0 percent

during the review quarter, boosted by the

growth in private spending and the surge in

public investment. Meanwhile, economic

activity in Indonesia and Malaysia moderated

with the decline in exports.

B. Challenges and Policy Directions

Global growth for 2015-2016, at 3.5 percent

and 3.8 percent, respectively, is expected to

be soft and uneven particularly in advanced

economies (AEs). Meanwhile, emerging

market economies (EMEs) are facing more

subdued growth prospects owing largely to

weak external demand. On the upside, lower

oil prices could provide a sizable boost to the

global economy.

Against the present global outlook, a key

challenge to the Philippine economy is the

downside risks to external demand which

could affect the country’s export activity as

growth in AEs remains uneven. The recovery

in the US could boost the country’s external

balance through export receipts and

remittance inflows. However, this could be

moderated by the growth outlook for the EU

and Japan, as well as the relatively subdued

prospects in EMEs, particularly China.

In addition, the global economy could enter a

period of low-growth conditions which,

in turn, could drag down external demand in

the medium term.

Given the prospect of the US Fed’s

normalization of monetary policy, the

Philippines could also face tighter financial

conditions as a result of volatility in the global

financial markets. Nevertheless, the possible

tightening of financial conditions may be

partially counterbalanced by the continued

monetary accommodation in the EU and

Japan.



First Quarter 2015

Meanwhile, the decline in international oil

prices over the past year has resulted in the

moderation of domestic inflation pressures

which is seen to support private spending in

the near term. At the same time, this could

provide the BSP flexibility to keep policy rates

at current levels in support of economic

growth. Moreover, the risk of a demand-led

deflation in the country is likely to be minimal

since domestic demand conditions remain

firm, wages are rigid downwards and inflation

expectations are well-anchored.

A critical domestic challenge moving forward

is addressing structural bottlenecks,

particularly infrastructure challenges, to lift

investment and realize new growth sources.

Efforts by the NG to ramp up spending and

accelerate infrastructure projects will help to

raise potential output and thereby sustain the

growth momentum of the economy.

Toward this end, the public-private

partnership (PPP) initiative of the government

is expected to bridge the infrastructure gap.

Moreover, NG has announced that

infrastructure spending is targeted to reach

up to 4 percent of GDP in 2015.

For its part, the BSP will continue to be

data-dependent in its assessment of evolving

price and output developments to ensure that

the monetary policy stance remains

consistent with ensuring price and financial

stability while supporting sustainable

economic growth.

In addition, the BSP remains prepared to

deploy a menu of policy actions, as needed,

to rein in inflation expectations even as

previous monetary responses continue to

work their way through the economy.

The BSP is prepared to temper any adverse

impact of possible capital outflows on the

domestic economy by ensuring adequate

level of liquidity in the financial markets

during periods of heightened uncertainty and

increased risk aversion. While guarding

against speculative flows that could lead 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 reserves.

On banking regulation and supervision, the

BSP intends to sustain the reform momentum

with a view to enhance the financial sector’s

resilience against shocks as well as boost its

role as a catalyst for durable long-term

economic growth. Toward this end, the BSP

continues to pursue measures to strengthen

corporate governance, enhance transparency,

expand financial products and markets, help



First Quarter 2015

develop market infrastructure, and upgrade

banking policies and guidelines.

On a broader perspective, the BSP will further

foster an enabling environment to promote

greater access to the financial system through

its financial inclusion program. Likewise, the

BSP will maintain a proactive stance in

ensuring the credibility of the payments and

settlements system. Finally, the BSP will

remain an active participant in regional and

international cooperation programs and fora,

in order to reap the benefits of collaborative

engagement.



First Quarter 2015

A. Real Sector

Aggregate Supply and Demand

The Philippine economy started the year with a lower-than-expected

growth of 5.2 percent for Q1 2015. This growth performance is lower

compared to its quarter-ago and year-ago rates of 6.6 percent and

5.6 percent, respectively. The modest growth during the quarter was

attributed mainly to the slower-than-programmed pace of

government spending and softening in exports.

The major supply-side contributor to the Q1 2015 growth was the

sustained robust performance of the services sector. Boosting the

expansion in the services sector were the positive performances of the

following sub-sectors: transport, storage & communication; real

estate, renting and business activities; and trade and maintenance of

motor vehicles, motorcycles, personal and household goods.

On the demand side, growth was buoyed largely by the strong

MAIN REPORT

The Philippine

economy posts a

lower-than-expected

growth

Gross Domestic Product and Gross National Income

annual growth rate in percent; at constant 2000 prices

2

3

4

5

6

7

8

9

10

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

Real GDP Real GNI

20132012 2014 2015



First Quarter 2015

performance of household spending, capital formation, and the

positive growth in government spending relative to its Q1 2014

performance.

Meanwhile, real GNI posted a 4.7 percent growth in Q1 2015, lower

than the 6.6 percent in Q1 2014. This was due in part to the decline of

the net primary income from the rest of the world which reflected the

weaker growth of compensation of OF workers in Q1 2015 of

2.0 percent compared to its year-ago growth of 12.6 percent. The

latter partly reflects base effects resulting from relatively high

remittance levels in 2014 as a result of transfers from OFs intended for

the rebuilding efforts in the aftermath of Typhoon Yolanda.

GDP by industry

Broad-based growth was observed in Q1 2015 as all sectors – AHFF,

industry, and services – posted positive increases. The services sector

remained the main driver of domestic expansion during the quarter.

The sector has been posting a steady growth of 5.6 percent over the

past three quarters, albeit lower than its Q1 2014 growth of 6.8 percent

(Table 1). Of the 5.2 percent Q1 2015 GDP growth, the services sector

was able to contribute 3.1 percentage points (ppts). Lending support

to the services sector were the trade sub-sector which contributed

1.5 ppts to total services sector growth; transportation, storage, and

communication as well as real estate, renting and business activities

sub-sector (1.2 ppts, respectively); and other services (1.1 ppts).



First Quarter 2015

The second major growth driver in Q1 2015 was the industry sector,

which added 1.9 ppts to the total GDP growth following a 5.5 percent

expansion. This growth was slightly higher than the previous year’s

5.4 percent expansion, but lower than its quarter-ago performance of

9.1 percent. In part, this could be attributed to the deceleration in the

growth of the construction sub-sector to 4.5 percent in Q1 2015 from

17.9 percent in Q4 2014. This happened as public construction

registered a double-digit contraction of 24.6 percent in Q1 2015 amid

some government spending bottlenecks as well as delays in the

implementation of programs and projects by some government

agencies. On the other hand, the manufacturing sub-sector continued

to provide a boost to the industry sector’s expansion, comprising

4.2 ppts of the total industry sector’s growth during the review quarter.

The primary contributors to the manufacturing sub-sector’s solid

performance were the radio, television and communication equipment

and apparatus (1.8 ppts), basic metal industries (1.2 ppts), chemical

and chemical products (1.1 ppts), beverage industries (0.7 ppts), and

publishing and printing (0.5 ppts).

Meanwhile, the AHFF sector posted a modest growth of 1.6 percent in

Q1 2015 and contributed 0.2 ppts to total GDP growth.

Gross Domestic Product, by Industry


-4

-2

0

2

4

6

8

10

12

14

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

Agriculture, Hunting, Forestry and Fishing Industry Services

2012 2013 2014 2015



First Quarter 2015

This is higher than its year-ago growth of 0.6 percent, but lower than

its 4.2 percent growth in Q4 2014. The weak performance of the sector

during the review quarter was on the back of the decline in the

production of the sector’s two major crops - palay and corn.

The reported contraction of harvest area and drop in yield was

attributed to a wide array of factors including, among others: the

adverse effects of typhoons Seniang (which affected Capiz and Negros

Occidental) in December 2014 and Amang (Camarines Sur) in January

2015, intense heat, insufficient water supply, incidence of pests and

crop diseases, and strong winds experienced in some provinces.

Palay production in Q1 2015 recorded a 1.6-percent growth, lower

compared to the rates posted in the past year and during the previous

quarter of 3.3 percent and 6.8 percent, respectively. On the other

hand, corn yields registered a 4.0 percent increase in Q1 2015,

representing a significant deceleration from the 27.3 percent growth

in Q4 2014. Meanwhile, the productivity of the fishing sub-sector

contracted by 2.6 percent in Q1 2015, a reversal from the 4.2 percent

growth recorded in Q4 2014. Low stocking rate and low survival rate of

some fish varieties which contributed to lower production were, to a

certain extent, a result of insufficient water supply brought about by

warm weather conditions as well as the sudden change of water

temperature in certain provinces.

GDP by expenditure

On the expenditure side, household spending remains as the principal

source of economic expansion, contributing 3.7 ppts to the total

Q1 2015 GDP growth. This is reflective of the share of household

spending to total domestic output during the review quarter of about

70.0 percent. While the growth of household consumption was

subdued at 5.4 percent in Q1 2015 relative to its 6.1 percent growth in

the same period last year, it represented a 0.4-ppt increase compared



First Quarter 2015

to its quarter-ago growth rate (Table 1a). The sustained positive

growth in consumer spending is strongly supported by stable prices of

commodities, decline in oil prices, availability of more jobs, higher

number of employed family members, and fewer typhoons during the

period.

The second major growth driver on the demand side is capital

formation, which accounted for 2.6 ppts of the total GDP growth in

Q1 2015, after posting an 11.8-percent increase. Lending a boost to

investments is the 14.3-percent growth in durable equipment,

supported mainly by the 14.2-percent rise in private construction.

These increases reflected in large part the continued buoyant

sentiment of the private sector on the prospects for domestic

economy. Government consumption has also offered an additional

push to the Q1 2015 growth, albeit modestly, after posting a

4.8-percent expansion compared to the 1.9 percent increase seen in

the same period last year. Such development was predominantly

credited to the accelerated disbursements of funds for maintenance

and other operating expenses. These disbursements were directed

toward social protection programs, bottom-up budgeting projects,

Gross Domestic Product, by Expenditure


-35

-25

-15

-5

5

15

25

35

45

55

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

Household Final Consumption Expenditure

Government Final Consumption Expenditure

Capital Formation

2012 2013 2014 2015



First Quarter 2015

and other expenses related to the Asia-Pacific Economic Cooperation

meetings which the country is hosting.

Moving forward, the government is committed to accelerate public

spending and implementation of priority projects to bolster the

domestic economy. With recent efforts of the government to fast-track

programmed disbursements, higher growth in the next three quarters

could be expected to suppport the government’s growth target for

2015.

Labor and Employment

The results of the January 2015 LFS1 of the PSA showed an

improvement in the country’s labor indicators, with employment

growing 2.8 percent to 37.5 million in Q1 2015 from 36.4 million a year

ago (Table 2). All sectors registered growth, led by services which

generated the highest number of new jobs.

The number of jobless persons fell further, declining to 2.6 million in

Q1 2015 from 3.0 million a year earlier. The unemployment rate

dropped to 6.6 percent in Q1 2015 from 7.5 percent in Q1 2014 while

the underemployment rate also declined to 17.5 percent from

19.5 percent (Table 2). Meanwhile, the labor force participation rate

remained steady at 63.8 percent.

1 January 2015 and October 2014 figures are preliminary. Estimates for January 2015 and January 2014

exclude Region VIII. Estimates for April, July, and October 2014 exclude Leyte province.

Labor market

continues

improvement



First Quarter 2015

The number of employed persons increased by 2.8 percent to

37.5 million from 36.4 million, boosted by strong growth in all sectors

led by services. Employment in the services sector grew by

3.9 percent led by an expansion in the wholesale and retail trade

(4.3 percent or by 292,000) while the industry sector grew by

2.9 percent due mainly to robust growth in construction (4.7 percent

or by 109,000) and manufacturing (2.0 percent or by 62,000).

The agriculture sector improved slightly by 0.9 percent. Of the

37.5 million employed persons, 54.6 percent were in the services

sector, 29.5 percent in the agriculture sector and the remaining

15.9 percent in the industry sector.

Employment growth occurred across most classes of workers, led by

wage and salary workers (up by 3.5 percent or 737,000), particularly

those who worked in private establishments. Also posting gains were

self-employed workers without any paid employees (1.8 percent or

190,000) and unpaid family workers (5.4 percent or 208,000).

The number of persons on full-time and part-time employment both

increased by 2.5 percent (560,000) and 4.6 percent (603,000),

respectively.

Unemployment and Underemployment Ratesin percent

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

Unemployment Rate (LHS) Underemployment Rate (RHS)

2012 2013 2014 2015



First Quarter 2015

B. Fiscal Sector

National Government Cash Operations

The cash operations of the NG yielded a lower deficit of P33.5 billion

in Q1 2015 from the year-ago level of P84.1 billion. It is likewise

65.9 percent lower than the P98.1 billion programmed deficit for the

review period (Table 3). The NG’s cash position as a percent of GDP

stood at -1.1 percent in Q1 2015 from the year-ago level of

-2.9 percent.

Total revenues for Q1 2015 reached P470.5 billion, higher than the

year-ago level of P398.4 billion, but 2.8 percent lower than the target

level for the quarter of P484.1 billion. The increase from the

year-ago level was due mainly to improved collections by the Bureau

of Internal Revenue (BIR) and the Bureau of Customs (BOC).

Tax collections, which constituted 85.6 percent of total revenues,

amounted to P402.9 billion, 13.4 percent higher than the year-ago

level. Non-tax revenues, including grants, which consisted mainly of

collections made by the BTr, increased by 56.5 percent from the

year-ago level.

Cash Operations of the National Government

in billion pesos

-200

-100

0

100

200

300

400

500

600

700

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

Revenues Expenditures Surplus/Deficit (-)

2012 2013 2014 2015

NG cash operations

yield a lower deficit



First Quarter 2015

Meanwhile, total expenditures in Q1 2015 reached P504.0 billion,

4.5 percent higher than the P482.5 billion expenditures in Q1 2014, but

13.4 percent lower than the P582.2 billion programmed expenditures

for the quarter. The increase in expenditures can be attributed to

increased allotment to LGUs and tax expenditures during the quarter.

The NG’s net repayment for Q1 2015 amounted to P4.0 billion,

a reversal from the year-ago net availment of P7.0 billion.

The net repayment resulted from the higher repayment than issuances

of domestic instruments (-P26.6 billion). The net repayment for the

review quarter was based on a gross financing mix ratio of 54:46, in

favor of external sources.

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. Greater fiscal space resulted from proactive

liability management, enhanced implementation of tax administration

measures, and legislative reforms (e.g., Sin Tax Reform law). The need

to address infrastructure gaps is a top priority. There are plans to

increase spending on infrastructure to 5 percent of GDP by 2016.

C. Monetary Sector

Prices

Headline inflation eased further to 2.4 percent in Q1 2015 from the

quarter- and year-ago rates of 3.6 percent and 4.1 percent,

respectively (Table 4). This was within the Government’s inflation

target range of 3.0 percent ±1.0 percentage point for the year.

The continued deceleration in headline inflation was driven largely by

the slower increases in food prices as a result of adequate domestic

Inflation falls further

on lower food prices



First Quarter 2015

supply. Likewise, non-food inflation slowed down due to the decline in

the prices of electricity and domestic petroleum products.

Core inflation, which excludes some food and energy items to measure

underlying price pressures, decreased further to 2.5 percent in

Q1 2015 from 2.7 percent in Q4 2014 and 3.0 percent in Q1 2014.

Two out of three alternative measures of core inflation estimated by

the BSP were also lower during the review period relative to the rates

registered in the previous quarter. In particular, the trimmed mean and

net of volatile items measures edged lower to 3.0 percent and

2.3 percent, respectively, from the quarter-ago rates of 3.3 percent

and 2.4 percent. By contrast, the weighted median measure increased

to 3.0 percent in Q1 2015 from 2.7 percent a quarter ago.

Core inflation eases

Alternative Core Inflation Measuresquarterly averages of year-on-year change

Quarter

Official

Headline

Inflation

Official

Core

Inflation

Trimmed

Mean 1Weighted

Median 2

Net of

Volatile

Items 3

2012 3.2 3.7 3.2 3.0 3.4

Q1 3.1 3.5 3.0 2.6 3.0

Q2 2.9 3.7 3.1 3.2 3.3

Q3 3.6 4.1 3.4 3.2 3.9

Q4 3.0 3.4 3.2 3.0 3.4

2013 3.0 2.9 2.5 2.3 3.1

Q1 3.2 3.8 3.0 2.8 3.9

Q2 2.7 2.9 2.3 2.3 3.2

Q3 2.4 2.1 2.1 2.0 2.4

Q4 3.4 2.9 2.6 2.2 2.9

2014 4.1 3.0 3.5 2.9 2.7

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

Q1 2.4 2.5 3.0 3.0 2.31

The trimmed mean represents the average inflation rate of the (weighted) middle 70 percent in a

lowest-to-highest ranking of year-on-year inflation rates for all CPI components.2

The weighted median represents the middle inflation rate (corresponding to a cumulative CPI

weight of 50 percent) in a lowest-to-highest ranking of year-on-year inflation rates.3

The net of volatile items method excludes the following items: bread and cereals, meat, fish, fruit,

vegetables, gas, solid fuels, fuels and lubricants for personal transport equipment, and

passenger transport by road, which represents 39.0 percent of al l items. The series has been

recomputed using a new methodology that is al igned with PSA's method of computing the official

core inflation, which re-weights remaining items to comprise 100 percent of the core basket after

excluding non-core items. The previous methodology retained the weights of volati le items in the

CPI basket while keeping their indices constant at 100.0 from month to month.

Source: Phil ippine Statistical Authority (PSA), BSP estimates



First Quarter 2015

Food inflation fell further to 5.0 percent in Q1 2015 from 6.6 percent

in Q4 2014 on ample domestic supply of all food items, except fruits.

Rice inflation eased further as the market remained well supplied due

to additional harvests in a number of rice-producing provinces.

Similarly, the continued decline in the prices of imported commodities

such as sugar, vegetable oils, cereals, and meat contributed to the

decline in food inflation.

Conversely, alcoholic beverages and tobacco (ABT) inflation rose

slightly to 4.0 percent in Q1 2015 from 3.9 percent in the previous

quarter owing to the annual tax adjustments mandated by Republic Act

(RA) No. 10351. It should be noted that prices of ABT increased

following the implementation of RA No. 10351, which raised the excise

tax on alcohol and tobacco products in January 2013.

Non-food inflation decelerated further to 0.6 percent in Q1 2015 from

1.4 percent in Q4 2014 due mainly to lower prices of electricity, gas,

and other fuels (-8.7 percent from -2.7 percent) and operation of

personal transport equipment (-10.5 percent from -2.2 percent).

Inflation on electricity, gas, and other fuels declined on lower

generation charges as well as price reductions in kerosene and LPG.

Ample domestic

supply of key food

items drives down

food inflation

Lower prices of

electricity and

domestic petroleum

products contribute

to the slowdown in

non-food inflation

Food and Non-Food Inflation in the Philippines (2006=100)in percent

0

1

2

3

4

5

6

7

8

9

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

Headline Inflation

Food Inflation

Non-Food Inflation

2012 2013 2014 2015



First Quarter 2015

Meanwhile, reduction in the pump prices of diesel and gasoline

(reflecting declines in international oil prices) led to the fall in inflation

in personal transport equipment.

In terms of geographical location, the inflation rate in the National

Capital Region (NCR) slowed down to 1.9 percent in Q1 2015 compared

to its quarter-ago rate of 2.5 percent (Table 4a). Similarly, the inflation

rate in areas outside NCR (AONCR) decreased to 2.6 percent from

3.8 percent in Q4 2014 (Table 4b).

In NCR, food inflation declined to 4.6 percent in Q1 2015 from

6.0 percent in Q4 2014, due mainly to the slower increase in the prices

of all food items, except fruits and vegetables. Likewise, non-food

inflation went down to 0.7 percent from 1.0 percent in the previous

quarter as a result of the continued fall in the prices of housing, water,

electricity, gas, and other fuels as well as the slower price increases in

most non-food items, except transport and education.

In AONCR, food inflation was lower at 5.0 percent in Q1 2015

compared to the quarter-ago rate of 6.7 percent as all food items,

except fish, posted lower inflation rates. Similarly, non-food inflation

Inflation decreases in

both NCR and AONCR

Inflation Rate (2006=100)in percent

0

1

2

3

4

5

6

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

Philippines

National Capital Region

Areas Outside the National Capital Region

201420132012 2015



First Quarter 2015

decelerated to 0.5 percent in Q1 2015 from its quarter-ago rate of

1.5 percent owing largely to the decline in the prices of housing, water,

electricity, gas, and other fuels, and transport.

Domestic Liquidity2

Money supply or M3 grew by 8.7 percent y-o-y as of end-March 2015

to reach P7.6 trillion. This growth was slower than the 11.2 percent

expansion as of end-December 2014 (Table 5).

The increase in M3 was driven largely by the 10.4-percent y-o-y

expansion in domestic claims or credits to the domestic economy in

March 2015. Credits extended to the private sector grew by

16.0 percent, consistent with the sustained growth in bank lending.

Meanwhile, net claims on the central government declined by

8.3 percent.

Net foreign assets (NFA) in peso terms rose by 8.4 percent y-o-y in

March 2015. The BSP’s NFA position expanded during the month on

the back of continued robust foreign exchange inflows coming mostly

from overseas Filipinos’ remittances and business process outsourcing

receipts. The NFA of banks likewise increased as banks’ foreign assets

2 The indicators used for money supply are: M1 (or narrow money), comprised of currency in circulation

and demand deposits; M2, composed of M1 plus savings and time deposits (quasi-money); M3, consisting

of M2 plus deposit substitutes; and M4, consisting of M3 plus foreign currency deposits.

Mar-15 Dec-14 Mar-14

Quarter-

on-

Quarter

Year-on-

Year

Domestic Liquidity (M3) 7,639.7 7,703.9 7,029.4 -0.8 8.7

of which:

Net Foreign Assets 3,875.6 3,752.1 3,576.3 3.3 8.4

Domestic Claims 6,987.6 7,053.0 6,332.0 -0.9 10.4

of which:

Net Claims on Central Government 1,089.8 1,119.1 1,188.5 -2.6 -8.3

Claims on Other Sectors 5,897.7 5,933.9 5,143.4 -0.6 14.7

Domestic Liquidity (M3)

Particulars

Levels (in bil lion pesos) Growth Rates (in %)



First Quarter 2015

continued to expand due mainly to the growth in their investments in

marketable debt securities and deposits with other banks, while banks’

foreign liabilities decreased on account of lower placements made by

foreign banks with their local branches.

Domestic liquidity growth during the quarter was broadly slower

relative to a year ago, reflecting the gradual normalization of liquidity

expansion after the operational adjustments involving access of trust

entities to the BSP SDA facility were completed in November 2013.

Following the slower expansion in M3, the growth of M4, a broader

concept of domestic liquidity comprised of broad money liabilities and

foreign currency deposits of residents, likewise decelerated to

9.6 percent y-o-y in March 2015 from 12.4 percent in December 2014.

Domestic Interest Rates

Average T-bill rates in the primary market rose across the board in

Q1 2015 due to investor preference for longer-term debt papers.

The 91-day, 182-day, and 364-day T-bill rates rose slightly to

1.47 percent, 1.73 percent and 1.95 percent in Q1 2015 from the

Q4 2014 rates of 1.29 percent, 1.70 percent and 1.83 percent,

respectively (Table 6).

By contrast, the yields of GS in the secondary market generally declined

as of end-March 2015 compared to the rates as of

end-December 2014. Positive investor sentiment amid ample market

liquidity and expectations of a benign inflation environment supported

the drop in the yields of most maturities, ranging from 0.7 bp (1-year)

to 30.0 bps (10-year). Meanwhile, the yields of 2-year, 4-year and

5-year GS increased by 13.9 bps, 1.6 bps and 14.8 bps, respectively.

Primary rates increase

across the board

Secondary market GS

yields decline generally



First Quarter 2015

Domestic interest rates showed mixed trends for the quarter, owing to

lower domestic inflation on the one hand and uncertainty over the

pace of the US Fed rate hike on the other. The savings and time deposit

rates were higher in Q1 2015 by 1.4 bps, and 2.9 bps, respectively.

The interbank call loans rate and bank lending rates, meanwhile,

decreased by 1.2 bps and 15.4 bps, respectively.

The differentials (gross and net of tax) between the domestic and

US interest rates widened in Q1 2015 relative to Q4 2014. The 16.5-bp

increase in the average 91-day T-bill rate led to the higher differential

against the average US 90-day T-bill rate which rose by 2.4 bps and the

average US 90-day LIBOR which fell by 1.4 bps.

The mixed trends for foreign interest rates were due to fears of

deflation across the Euro zone and Asia, uncertainty over the US Fed

rate hike and the Greece-EU bailout negotiations.

The positive differential between the BSP's policy interest rate

(overnight borrowing or RRP rate) and the US Federal Funds target rate

remained at about 375 bps as of end-March 2015, as both the RRP and

the US Federal Funds target rate remained unchanged during the

Interest rate

differentials widen

Other market interest

rates show mixed

trends



First Quarter 2015

quarter. Adjusted for the risk premium (measured as the difference

between the 10-year ROP and the 10-year US note), the spread

between the two policy rates narrowed to 249 bps in end-March 2015

from 287 bps in end-December 2014. The 8.9-bp increase in the yield

on the 10-year ROP note amid the 28.6-bp decrease in the 10-year

US Treasury note led to the increase in the risk premium.

Monetary Policy Developments

During its monetary policy meetings on 12 February and 26 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. The reserve requirement ratios were

left unchanged as well.

The MB’s decision was based on its assessment that the inflation

environment continued to be manageable. Latest baseline forecasts

indicated that inflation is likely to settle within the lower half of the

target range of 3.0 percent ± 1 ppt for 2015 and 2016. The forecasts

were also supported by well-anchored inflation expectations, which

remained within the target band over the policy horizon.

The MB likewise noted that the risks to the inflation outlook continued

to be broadly balanced, with upside risks emanating from pending

petitions for adjustments in utility rates and possible power shortages.

Meanwhile, global economic activity has turned slightly more positive

but continued to be uneven, which could further mitigate upward

pressures on commodity prices.

At the same time, the MB observed that domestic demand conditions

remained robust, owing to solid private demand, adequate domestic

The BSP maintains

monetary policy

settings during the

quarter



First Quarter 2015

liquidity, and buoyant business sentiment. Higher public spending was

also expected to support economic activity.

Given these considerations, the MB was of the view that current

monetary policy settings remain appropriate. Going forward, the BSP

will continue to monitor domestic and external developments affecting

the inflation outlook to ensure that the monetary policy stance

remains consistent with its price and financial stability objectives.

D. Financial Sector

The Philippine banking system continues to register strong

performance. Banks’ balance sheets were marked by a sustained

growth in assets and deposits. Asset quality indicators also continued

to improve, while capital adequacy ratios remained above

international standards, even with the implementation of the tighter

Basel III framework.

Banks continued to dominate the financial sector, with U/KBs

accounting for 90 percent of total banks’ assets. In terms of the

number of head offices and branches/agencies, non-banks 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 648 as of

end-December 2014 from the year- and quarter- ago levels of 673 and

652, respectively, indicating continued consolidation of banks as well

as the exit of weaker players in the banking system (Table 7).

Philippine banking

system maintains

strong stance and

positive outlook in

Q1 2015

Number of banks

declines, but operating

network continues to

expand



First Quarter 2015

By banking classification, banks (head offices) consisted of 36 universal

and commercial banks (U/KBs), 69 thrift banks (TBs), and 543 rural

banks (RBs). Meanwhile, the operating network (head offices and

branches/agencies) of the banking system expanded to 10,361 offices

in Q4 2014 from 9,935 offices during the same period in the previous

year and 10,207 offices in Q3 2014, due mainly to the increase in the

branches/agencies of U/KBs, TBs and RBs.

The increase in the resources of the banking system slowed down to

8.9 percent to P11.4 trillion as of end-March 2015 from the year-ago

level of P10.4 trillion (Table 8). The deceleration from the 11.8 percent

growth in Q4 2014 could be traced to the slower growth of bank

lending. U/KBs accounted for 90 percent of the total resources of the

banking system. As a percent of GDP, total resources slightly decreased

to 88.9 percent in Q1 2015.

Total Resources of the Banking SystemLevels in trillion pesos; share in percent

0

20

40

60

80

100

0

2

4

6

8

10

12

14

Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar

Total Resources (LHS) as % of GDP (RHS)

2012 2013 2014 2015



First Quarter 2015

Savings Mobilization

Savings and time deposits remained the primary sources of funds for

the banking system. Banks’ total deposits3 as of end-March 2015

amounted to P6.7 trillion, 7.5 percent or P4.7 billion higher than the

year-ago level. The upturn in deposits in the first quarter was

a slowdown from the 10.4 percent rise posted in the previous quarter.

Savings and demand deposits expanded by 3.9 percent and

12.8 percent, respectively.4 Time deposits likewise grew by 9.6 percent

to P1.8 trillion as of during the review period. Meanwhile, foreign

currency deposits (FCD-Residents) owned by residents, grew by

8.8 percent, y-o-y.5

3 This refers to the total peso-denominated deposits of the banking system. 4 The domestic liquidity or M3 growth in March 2015 also reflects statistical base effects associated with

the significant increase in domestic liquidity a year ago of 35.3 percent, following the operational

adjustments involving access of trust entities to the BSP SDA facility, which were completed in November

2013. Along with the savings, time and demand deposits, M3 includes currency in circulation and deposit

substitutes. 5 M4 is the sum of M3 and FCD-Residents.

Deposits

continues to grow

in Q1 2015

Deposit Liabilities of Banks

in billion pesos

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000


Demand Savings Time FCD

2012 2013 2014 2015



First Quarter 2015

Bank Lending Operations

Outstanding loans of U/KBs as of end-March 2015, net of banks' RRP

placements with the BSP, rose by 16.1 percent. Likewise, bank lending,

inclusive of RRPs, increased by 15.7 percent relative to the level posted

in Q1 2014. The increases, however, were slower compared to the

previous quarter on both net (19.9 percent) and gross (19.1 percent)

of RRP placements bases. Commercial banks' loans have been

increasing steadily at double-digit pace since January 2011.

The continued broad-based growth in bank lending supported the

sustained expansion of the productive sectors of the economy in

Q1 2015.

Loans for production activities—which comprised more than

80.0 percent of banks’ aggregate loan portfolio—grew, y-o-y,

by 15.8 percent as of March 2015. The growth in production loans

during the review quarter was driven primarily by lending to the

following sectors: real estate, renting, and business services

(12.6 percent); manufacturing (13.9 percent); wholesale and retail

trade (15.1 percent); electricity, gas and water (16.8 percent);

and financial intermediation (22.9 percent). Bank lending to other

Loans Outstanding of Commercial Banks (Gross of RRPs)in trillion pesos

0

1

2

3

4

5


2012 2013 2014 2015

Bank lending slightly

contracted, q-o-q



First Quarter 2015

sectors also increased except for public administration and defense,

which declined by 2.9 percent. Loans for household consumption

expanded by 19.8 percent in Q1 2015 amid continued growth in credit

card loans, auto loans and other types of loans (i.e., salary loans and

personal loans).

Credit Card Receivables

The combined credit card receivables (CCRs) of U/KBs and TBs as of

end-December 2014, inclusive of credit card subsidiaries, increased by

4.4 percent to P164.3 billion relative to the previous year’s level of

P157.4 billion. Meanwhile, the ratio of CCRs to the total loan portfolio

(TLP) was at 3.0 percent as of end-December 2014, lower than the

3.4 percent registered a year ago. In terms of loan quality, the ratio of

non-performing CCRs to total CCRs at 8.2 percent was an improvement

from last year’s 9.6 percent, due to the 10.9 percent decrease in the

banking system’s non-performing CCRs.

Auto Loans

The combined auto loans (ALs) of U/KBs and TBs, inclusive of

non-bank subsidiaries, increased by 23.5 percent to P230.1 billion as of

end-December 2014 from P186.3 billion a year ago. Consumers’ strong

demand, particularly from the BPO market, for passenger cars

(e.g. those falling under the sub-compact category) and commercial

vehicles, introduction of new and improved models, appropriate

product mix, as well as attractive financing packages from banks and

other car financing firms, amidst the mild slowdown in economy,

helped sustain the rise in vehicle purchases. The share of total ALs to

TLP, exclusive of interbank loans (IBL), however, increased slightly to

4.2 percent relative to the previous quarter’s 4.1 percent.

Auto loans increase

further as industry is

boosted by the

significant demand,

particularly from the

BPO market, along

with the right product

mix and better

financing schemes

Credit card

receivables continue

to grow while asset

quality continues to

improve



First Quarter 2015

In terms of loan quality, the ratio of non-performing ALs to total ALs of

4.3 percent was higher than the previous year’s 4.2 percent.

Salary Loans

Salary loans (SLs) extended by U/KBs and TBs, inclusive of non-bank

subsidiaries, increased significantly by 30.4 percent to P62.1 billion as

of end-December 2014 from P44.6 billion as of end-June 2014.6

The share of total SLs to TLP, exclusive of IBL, increased slightly to

1.1 percent relative to 0.9 percent as of mid-2014.

In terms of loan quality, the ratio of non-performing SLs to total SLs of

4.6 percent is an improvement relative to the previous 5.6 percent

during the same period.

Residential Real Estate Loans

As of end-December 2014, the combined residential real estate loans

(RRELs) of U/KBs and TBs rose by 24.3 percent relative to the previous

year's P320.5 billion. 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 in

terms of offering lower interest rates supported the growth in real

estate purchases during the review period. The ratio of RRELs to TLP

increased, however, to 7.3 percent relative to the previous year’s

7.0 percent. By industry, U/KBs held a bigger slice of the total

residential real estate exposure at 58.9 percent (P234.4 billion),

while TBs accounted for the remaining 41.1 percent (P163.8 billion).

In terms of loan quality, the ratio of non-performing RRELs to total

6 Data collection started with June 2014 data.

Household

investments continue

to boost the country’s

residential real estate

market

Salary loans rose by

almost a third, q-o-q



First Quarter 2015

RRELs of U/KBs and TBs increased to 3.1 percent from the previous

year’s 3.0 percent.

Asset Quality and Capital Adequacy

The Philippine banking system’s GNPL ratio, at 2.5 percent as of

end-March 2015, was lower than the year-ago’s 2.8 percent but slightly

higher than the quarter-ago’s 2.3 percent (Table 9).7 Nevertheless,

banks’ initiatives to improve their asset quality along with prudent

lending regulations helped maintain the GNPL ratio to a level below its

pre-Asian crisis at 3.5 percent8. Compared to the previous quarter, the

Q1 2015 GNPL ratio reflected the combined effect of the GNPL

expansion by P6.2 billion, from P134.8 billion in Q4 2014 to

P141.1 billion, and the banking system’s TLP decline by P101.0 billion,

from P5.8 trillion in Q4 2014 to P5.7 trillion. Similarly, the net

non-performing loan (NNPL) ratio rose slightly to 0.7 percent from

0.6 percent in the year- and quarter-ago ratios. In computing for the

NNPLs, specific allowances for credit losses9 on TLP are deducted from

the GNPLs. The said allowances increased to P102.7 billion in Q1 2015

from the P100.1 billion posted a quarter ago.

7 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. 8 The 3.5 percent NPL ratio was based on the pre-2013 definition. 9 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.



First Quarter 2015

The Philippine banking system’s GNPL ratio of 2.5 percent was higher

relative to Indonesia (2.3 percent), South Korea (1.6 percent), Thailand

(2.3 percent), and Malaysia (1.2 percent).10

The loan exposures of banks remained adequately covered as the

banking system registered an NPL coverage ratio of 116.7 percent.

The Q1 2015 ratio was lower than the 119.8 percent posted last

end-December 2014 but marginally higher than the year-ago ratio of

116.4 percent. 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.

Compliance with the BSP capital framework for U/KBs under the

Basel III framework11 took effect in 1 January 2014. The new Basel III

regime incorporates adjustments to the treatment of bank capital in

ways that enhance the use of the CAR as a prudential measure.

10 Sources: Various central bank websites, IMF and financial stability reports, Indonesia (commercial banks,

Q3 2014); Malaysia (banking system [impaired loans/net loans], Q1 2015); Thailand (commercial banks,

Q1 2015); and South Korea (domestic banks, Q1 2015). 11 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.

Ratio of Gross NPLs and Net NPLs to Total Loans of the Banking Systemin percent

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

2.1

2.3

2.5

2.7

2.9

3.1

3.3

3.5

3.7

3.9

4.1


Gross NPLs/Total Loans (LHS)

Net NPLs/Total Loans (RHS)

2012 2013 2014 2015

Banks remain

well-capitalized

amid tighter

capital requirements



First Quarter 2015

The CARs of U/KBs stood at 15.2 percent and 16.2 percent on solo and

consolidated bases at end-2014. These figures are well-above the BSP

regulatory threshold of 10.0 percent and international minimum of

8.0 percent.

The CAR figures slid from 16.5 percent on solo and 17.7 percent on

consolidated bases posted in the previous year. The decline reflected

the new treatment of “bank capital” applicable to FBBs as required

under Republic Act 10641, or “An Act Allowing Full Entry of Foreign

Banks in the Philippines”. This law became effective in the last quarter

of 2014.12

The industry’s capital structure remains primarily composed of high

quality Common Equity Tier 1 (CET 1). At end-2014, the U/KBs’ CET 1

comprised 12.5 percent and 13.6 percent of their risk weighted assets

(RWAs) on solo and consolidated bases. The banks’ Tier 1 ratio, on the

other hand, stood at 12.7 percent and 13.8 percent on solo and

consolidated bases.

Meanwhile, the RWAs of the U/KB industry rose by 6.8 percent, q-o-q,

at end-2014, due to a P357.2 billion increase in loans to the corporate

sector.

12 The new framework for FBBs provides that bank capital should mainly consist of Permanently Assigned

Capital (PAC) and derecognizes the “Net Due To” account from regulatory capital.



First Quarter 2015

The CAR of U/KBs on a consolidated basis at 16.2 percent was higher

than those of Malaysia (15.2 percent) and South Korea (13.9 percent),

but lower compared to those of Indonesia (19.5 percent) and Thailand

(16.6 percent).13

Banking Policies

Banking policies implemented during the quarter were aimed at

strengthening regulations on: (1) submission of reports by banks acting

as underwriters, brokers, dealers and transfer agents of securities;

(2) activities and services allowable for micro-banking offices;

(3) reports required from banks; (4) internal control and internal audit;

and (5) delivery of securities (Annex A).

13 Sources: Various central bank websites, IMF and financial stability reports, Indonesia (commercial banks,

Q3 2014); Thailand (commercial banks, Q1 2015); Malaysia (banking system, Q1 2015); and Korea (bank

holding companies, Q1 2015).

Capital Adequacy Ratio of Universal and Commercial Banksin percent

14

15

16

17

18

19

20

Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec

Solo Consolidated

2012 2013 2014 ** Basel 3 framework



First Quarter 2015

Capital Market Reforms

Capital market policy reforms continued to gain ground during the first

quarter of 2015 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 helping

develop market infrastructure, promoting investor confidence, and

enhancing transparency and corporate governance (Annex B).

Stock Market

The PSEi went up to average 7,681.8 index points in Q1 2015, higher by

24.0 percent than the year-ago’s average of 6,196.7 index points and

by 6.8 percent than the quarter-ago’s average of 7,190 index points.

The combination of favorable global developments (such as the easing

monetary stance by most central banks and the US Fed’s decision to

maintain its policy rates) and strong domestic macroeconomic

fundamentals (including the robust Q4 GDP growth and corporate

earnings, manageable inflation environment, strong external

payments position, sound and stable banking system, improving fiscal

space) pushed the index to register 23 new all-time highs in the first

three months of the year. The local bourse closed at 7,940.5 index

points as of 31 March 2015, higher by 9.8 percent year-to-date and by

23.5 percent relative to the level a year ago (Table 10).

BSP continues to

collaborate with

government agencies

and private sector in

developing the capital

market

Favorable global and

domestic

development lift the

benchmark stock

index to post 23 new

all-time high in the

first three months of

2015



First Quarter 2015

In January, strong buying sentiment on the back of the continued

decline in international oil prices and expectations of a delay in

US Fed interest rate hikes helped push the PSEi to cross the

7,600-barrier. Upbeat expectations over the country’s Q4 2014 GDP

growth also led the index to close the month at 7,689.9 index points,

6.4 percent higher than the closing index in end-December 2014.

In February, the local index breached the 7,800-mark, boosted by the

country’s higher-than-expected Q4 GDP growth and the BSP’s decision

to keep policy rates unchanged during its February policy meeting.

The market’s optimism over the positive turn in the Greece-EU bailout

negotiations as well as the People’s Bank of China’s move to cut

interest rates for the second time since November 2014 and lower

reserve requirements further pushed the local bourse upwards, closing

the month at 7,730.6 index points, higher by 0.5 percent

month-on-month and by 6.9 percent year-to-date.

In March, buying momentum continued over reports of strong

domestic corporate earnings and the low inflation environment.

China’s move to lower reserve requirements anew for all commercial

Philippine Stock Exchange Index (PSEi)quarterly average; in index points

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

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

2012 2013 2014 2015



First Quarter 2015

banks to spur credit and growth also boosted sentiment. Toward the

end of the month, the US Fed’s decision to maintain its interest rate at

0.25 percent once again boosted investor sentiments. The PSEi crossed

the 8,000 barrier during intra-day trading on 30 March before closing

the month at 7,940.5 index points, higher by 2.7 percent

month-on-month and 9.8 percent year-to-date.

Other stock market indicators mirrored the rally in the local index.

Total stock market capitalization increased by 5.1 percent

quarter-on-quarter to reach P15.0 trillion as of end-March. Foreign

investors’ net purchases amounted to P48.9 billion during the quarter,

an improvement from the net sales of P3.7 billion posted in the

preceding quarter. Data from Bloomberg also indicated that the

price-earnings ratio increased from an average of 20.8x in Q4 2014 to

an average of 21.6x in Q1 2015. At this level, Philippine shares are the

second most expensive in the ASEAN5 region, after Indonesia‘s 22.1x.

Meanwhile, on a quarter-on-quarter basis, six out of the seven

monitored Asia-Pacific national stock indices rallied relative to the

previous quarter, boosted by hints of a delay in the US interest rate

hike and the general easing in monetary policy stance by most central

banks. China’s bourse led the rally in Q1, with its average stock index

Other indicators affirm

upbeat sentiment in

the local bourse

PSE Market Capitalization by Sector: Q1 2015percent share

Financials

27.44%

Industrial

18.85%Holding Firms

23.50%

Services

14.55%

Property

12.31%

Mining and Oil

3.09%

SME

0.26%



First Quarter 2015

increasing by 27.1 percent quarter-on-quarter following the injection

of government stimulus to boost economic activity. This was followed

by the Philippines (6.8 percent), Indonesia (5.1 percent), Hong Kong

(3.9 percent), Singapore (3.4 percent) and Thailand (0.2 percent).

In contrast, the average Malaysian stock index retreated by

0.3 percent during the period in review.

Local Currency Bond Market

Size and Composition14

Local currency (LCY) bonds issued by both the public and private

sectors amounted to P122.0 billion in the first quarter of 2015, less

than half of the P673.0 billion registered in the previous quarter and

39 percent lower than the P199.4 billion in the same period in 2014.

The NG limited its issuance to T-bills and Fixed-rate Treasury bonds

(T-bonds) at P110.0 billion, down by 81.9 percent from Q4 2014 given

the absence of Retail and Benchmark bond issuances during the review

14 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.

LCY bond issuances of

the public and private

sectors decline

Selected Asian Stock Indicesin index points

0

5,000

10,000

15,000

20,000

25,000

30,000

Indonesia Singapore Philippines Hong Kong China Malaysia Thailand

Q2 2014 Q3 2014 Q4 2014 Q1 2015



First Quarter 2015

period. The private sector likewise issued less of LCY bonds which

amounted to P12.0 billion, 70.3 percent lower on a q-o-q basis and

87.9 percent less on a y-o-y basis.

In terms of market share, issuances from the NG continued to

dominate the domestic securities market, comprising 90 percent share

of the total bond issuances while the private sector comprised the

remaining 10 percent. Bonds issued by the Bureau of the Treasury (BTr)

accounted for the entire public sector issuance while issuers from the

private sector came from the real estate sector.

Local Currency Bond Issuancesin billion pesos

0

100

200

300

400

500

600

700

800

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Public Sector Private Sector

2013 2014 2015Source: Bureau of the Treasury; Bloomberg

Local Currency Bond Issuances: January-March 2015

Public

90%

Private

10%

Source: Bureau of the Treasury; Bloomberg



First Quarter 2015

Primary Market 15

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. Demand was robust as tenders were oversubscribed by

about two times. Tenders reached P131.1 billion as against the NG’s

offering of P60.0 billion for T-bills while T-bond tenders reached

P150.0 billion against the P75.0 billion offering.

The NG did not award in full its programmed borrowings as the banks

sought higher rates in the 5 January T-bill and 17 February T-bond

auctions that pushed the government to reject all the bids offered

during these auctions. The expected normalization of interest rate in

the US influenced largely the higher rates demanded by investors.

Secondary Market

Trading of both government and private corporate bonds declined,

albeit marginally, by 0.4 percent to P1,512 billion from P1,518 billion

registered in the previous quarter. However, it rose by 43.2 percent

from the same period a year ago.

15 The discussion includes primary market for government issuances only.

The NG rejected bids for

both T-bills and T-bonds

due to higher yields

demanded

Results of GS Auctionsin billion pesos

2015 Offerings TendersAccepted

Bids

Rejected

Bids

1st

Quarter 135.0 281.1 90.0 191.1

T-bills 60.0 131.1 40.0 91.1

T-bonds 75.0 150.0 50.0 100.0

Source: Bureau of the Treasury (BTr)

Trading slows down at

the secondary market



First Quarter 2015

The lower q-o-q growth can be attributed to the market’s

“wait-and-see” stance given the uncertainty in the timing and

magnitude of the US monetary policy tightening that is expected to

begin in 2015. However, trading at the Fixed Income Exchange (FIE)

was supported by the country’s sound macroeconomic fundamentals

with Fitch Ratings re-affirming the investment grade credit rating of the

Philippines in March 2015. Trading was dominated mostly by

FX Treasury Notes (FXTNs) accounting for about 86 percent while the

share of corporate bonds traded at the Exchange remained marginal at

0.4 percent and lower than the previous quarter’s 1.7 percent share.

Foreign Currency Bond Market

During the quarter, both the government and the corporate sector

raised funds in the offshore market. The Philippines issued

US$2 billion worth of new 25-year US dollar bonds with a coupon of

3.95 percent, significantly lower than the 5.0 percent previously issued

25-year bond in 2012. The country was the first to issue in the global

dollar bond market for 2015 with most of the proceeds, US$1.5 billion,

will be used to switch and retire old bonds while the US$500 million

will be used for funding the budget.

Both the NG and

private corporations

tap the international

bond market in raising

funds

Secondary Market Volume of Private Corporate and Government Bondsin billion pesos

0

500

1,000

1,500

2,000

2,500

3,000

3,500

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

2012 2013 2014 2015

Source: Philippine Dealing and Exchange Corporation



First Quarter 2015

For the private sector, banks issued 5-year dollar notes amounting to

US$543 million during the quarter. Proceeds will be used to finance

operations and retire existing debt.

Credit Risk Assessment

On 17 March 2015, Fitch Ratings maintained its credit ratings of the

Philippines for the second consecutive year.

The outlook on the long-term issuer defaults ratings (IDRs) is stable.

The country ceiling was also affirmed at “BBB” and the short-term

foreign currency IDR at “F3”. This is one notch below the rating

assigned by Moody’s Investors Service and Standard and Poor’s.

Fitch cited the following factors in maintaining the credit ratings: First,

the country’s strong macroeconomic performance, second,

remittances and growth of the BPO industry underpin the country’s

economic growth; third, Fitch also forecasts real GDP to grow at

6.3 percent in 2015 and 6.2 percent in 2016; fourth, the sustained

current account surpluses since 2003 have supported the build-up in

foreign exchange reserves and turned the country into a net external

creditor; and fifth, Fitch estimates the country was net external

creditor at 15.4 percent of GDP at end-2014, compared with the “BBB”

median net external debtor position of 4.7 percent of GDP.

Fitch Ratings

maintained its credit

ratings for the second

consecutive year

as of March 2015

Rating

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/n.a. BBB-/F3 Stable

Philippine Sovereign Credit Ratings



First Quarter 2015

Sovereign Spreads

The country’s 5-year sovereign CDS spreads averaged 92.7 bps as of

31 March, up from Q4 2014 average of 90.8 bps, indicating a rise in risk

aversion towards Philippine sovereign debt papers. Against those of

neighboring economies, the Philippine CDS traded lower than

Indonesia’s average of 154.6 bps, Malaysia’s 131.3 bps and Thailand’s

108.1 bps. On the other hand, the EMBI+Philippine spreads averaged

128.2 bps, down from the previous quarter’s 134.9 bps.

The widening of debt spreads during the quarter was attributed mostly

to the uncertainties over the timing of US Fed rate hike, exacerbated

by Greece bailout worries, negative headlines related to the Chinese

property sector, and volatilities resulting from the sudden move of

Swiss National Bank to remove its cap on its currency. These external

headwinds, among others, translated to the expansion in debt spreads

of emerging market bonds, including the Philippines.

In particular, statements from the US Fed that suggest interest rates

could rise in the near term kept spreads elevated in January and early

parts of March. Swings in US economic indicators, such as the bigger

than expected increase in US non-farm payrolls in February, bolstered

the case for the Fed to raise policy rates beginning June 2015.

Debt spreads widen



First Quarter 2015

Renewed concerns over Greece contributed to the expansion in

emerging market debt spreads as the EU considered the country’s list

of reforms inadequate.

On the other hand, the stimulus measures from the ECB and the Bank

of Japan implemented in Q1 2015 have eased widening pressures on

debt spreads. At the local front, the BSP’s move to keep policy rate

unchanged helped keep interest rates low both at the primary and

secondary markets for fixed income securities. By end of the quarter,

debt spreads declined after the US Fed announced a cut in its growth

and inflation outlook, allaying fears of a sooner-than-expected rate

hike.

As of 31 March, the extra yield investors demand to own Philippine

debt over U.S. Treasuries (or the EMBI+Philippine spread) stood at

123 bps, lower than end-December’s closing of 133 bps. On the other

hand, the country’s 5-year sovereign CDS climbed to 93 bps from

end-December’s 90 bps. Against other neighboring economies, the

Philippine CDS traded narrower than Indonesia’s 154 bps, Malaysia’s

134 bps, and Thailand’s 106 bps.



First Quarter 2015

Payments and Settlements System16

In Q1 2015, the total number of transactions settled and processed in

the Philippine Payments and Settlements System (PhilPaSS) increased

by 2.1 percent to 341,971 from the previous quarter’s level of 334,909.

The uptick in the number of transactions was due to the q-o-q increase

in the following: tertiary transactions in government securities trades

(15.5 percent), secondary transactions in government securities trades

(12.1 percent), US dollar trades (peso leg) via

payment-versus-payment (PvP) (6.1 percent), and interbank

transactions (3.0 percent).

On the other hand, the total value of transactions reached

P70.1 trillion, 7.2 percent lower from the quarter-ago level of

P75.5 trillion. The overall decrease in the total transaction value was

due to the q-o-q decline in the following accounts: Bancnet

transactions (17.0 percent), Megalink transactions (16.9 percent),

RP/RRP/SDA maturities transactions (13.7 percent), and interbank

transactions (9.3 percent).

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

by 0.3 percent and 27.1 percent, respectively.

16 Starting 1 April 2014, the volume and value of transactions exclude payment transfers to BSP Payments

Unit.

Volume of PhilPaSS

transactions

decreases

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

Volume 341,971 334,909 342,870 2.1 -0.3

Value (in trillion PhP) 70.1 75.5 96.1 -7.2 -27.1

Transaction Fees (in million PhP) 35.6 34.4 37.9 3.6 -6.1

PhilPass Transactions

Source: Payments a nd Settlements Offi ce , BSP

Growth Rates (%)2015 2014



First Quarter 2015

The total revenues derived from PhilPaSS operations increased by

3.6 percent to P35.6 million. In contrast, total revenues decreased by

6.1 percent relative to previous year’s level.

E. External Sector

Balance of Payments

The country’s balance of payments position yielded a surplus of

US$877 million in Q1 2015, a reversal of the US$4.5 billion deficit

registered in Q1 2014 (Table 11). This favorable development stemmed

from the robust inflows in the current account, combined with the

marked decline in net outflows (or net lending by residents to the rest

of the world) in the financial account. The current account continued

to perform strongly as all sub-accounts registered improvements.

Meanwhile, in the financial account, net outflows in the other

investment and portfolio investment accounts were significantly

lower. The improving global economic conditions supported the

favorable outturn in the country’s BOP. In particular, the economic

momentum in the United States remained firm and Japan showed

some modest expansion. Some growth was also seen in the euro area

owing largely to firming domestic demand and gradual strengthening

of external trade. Meanwhile, the global inflation environment

remained benign, reflecting the broadly subdued outlook for the

international price of oil. On the domestic front, manageable inflation,

higher-than-expected output growth in Q4 2014, and reports of strong

corporate earnings boosted investor optimism.

Q1 2015 BOP position

reverses to a surplus



First Quarter 2015

Current Account. The current account registered a surplus of US$3.3 billion

(equivalent to 4.8 percent of GDP) in Q1 2015, more than twice the

US$1.5 billion surplus (2.3 percent of GDP) posted in the comparable quarter

last year. The notable improvement in the current account surplus was

attributed to higher net receipts in the services, primary and secondary

income accounts coupled with the narrowing of the trade-in-goods deficit.17

Trade-in-Goods. The trade-in-goods deficit narrowed to US$4.7 billion in

Q1 2015 from US$5.4 billion in Q1 2014 due mainly to the combined effects

of the decline in imports of goods by 3 percent, stemming largely from the

drop in the value of petroleum crude imports due to the fall in the

international price of crude oil,18 and the expansion in exports of goods by

2.5 percent.

Exports of Goods. Exports of goods rose by 2.5 percent to reach

US$10.4 billion in Q1 2015 from US$10.2 billion in Q1 2014, driven by

the continued demand from major trading partners such as the US,

Hong Kong, and Malaysia. The uptrend was attributed mainly to

17 Primary Income account (formerly the Income account) shows the flows for the use of labor and financial

resources between resident and non-resident institutional units. Secondary Income account (formerly the

Current Transfers account) shows current transfers, in cash or in kind, for nothing in return, between

residents and non-residents. 18 Based on World Bank Commodities Price data, the average price of Dubai crude oil in January-March

2015 declined to US$52.2/barrel from US$104.4/barrel in January-March 2014.

Current account surplus

expands

Exports of goods rise

Trade-in-goods deficit

narrows as price of

crude oil falls

in million US$

2015 2014

Current Account 3,305 1,495

Capital Account 22 26

Financial Account * 606 4,098

Net Unclassified Items -1,845 -1,897

Overall BOP 877 -4,475

* 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.

Balance of Payments

Q1



First Quarter 2015

exports of manufactures which grew by 3.3 percent to reach

US$8.4 billion. In particular, higher shipments were posted for

non-consigned electronic products (including other electronics),

machinery and transport equipment, chemicals, and garments.

Exports of mineral products totaling US$792 million increased by

19.3 percent on account of higher shipments of copper metal.

Exports of coconut products rose by 25.4 percent to reach

US$441 million driven by higher export volume as the international

world price of coconut oil declined during the period. However, these

increments were moderated by the decline in exports of sugar and

products, petroleum, forest products, fruits and vegetables, and other

agro-based products.

Imports of Goods. Imports of goods amounted to US$15.1 billion in

Q1 2015, lower by 3 percent than the US$15.6 billion posted in

Q1 2014, due mainly to the contraction in imports of mineral fuels and

lubricants and capital goods.

Imports of mineral fuels and lubricants dropped by 38.7 percent, due

largely to the decline in the import value of other mineral fuels and

petroleum crude owing to lower prices in the world market even as

import volume increased following sustained demand to support

Imports of goods

decline



First Quarter 2015

domestic production. Imports of capital goods, which aggregated

US$3.3 billion during the quarter, decreased by 2.7 percent on account

largely of lower procurement of aircraft, ships and boats

(by 41.3 percent) and land transport equipment excluding passenger

cars and motorized cycle (by 4.4 percent).

Meanwhile, imports of raw materials and intermediate goods and

consumer goods grew in Q1 2015. Raw materials and intermediate

goods imports rose by 23.1 percent to US$5.5 billion, boosted by

increased imports of semi-processed raw materials (by 20.9 percent),

mainly materials and accessories for the manufacture of

non-consigned electronics (by 236.4 percent). Increases in the

importation of chemicals (by 9.7 percent) and manufactured goods

(by 2.4 percent) were also recorded during the quarter. Imports of

consumer goods rose by 7.2 percent to US$2.3 billion in Q1 2015 as

purchases of durable and non-durable goods were higher by

14.6 percent and 1.1 percent, respectively.

Trade-in-Services. Net receipts from trade-in-services rose to

US$2.5 billion in Q1 2015, compared to the US$1.8 billion net receipts

in Q1 2014. The 38.8 percent growth was due largely to net receipts in

Net receipts from

trade-in-services rise



First Quarter 2015

technical, trade-related and other business services (US$3.2 billion)19,

and computer services (US$928 million)20. Export revenues in business

process outsourcing services totaled US$4.3 billion in Q1 2015, or a

growth of 12.8 percent from the US$3.8 billion receipts in the same

quarter a year ago. Higher net receipts were likewise registered in

personal, cultural, and recreational services. Meanwhile, the decreases

in net payments of financial, and maintenance and repair services also

contributed to the growth in net receipts in trade-in-services.21

Primary Income. The primary income account recorded net receipts of

US$308 million in Q1 2015, more than fourfold the US$66 million net

receipts in the comparable period last year. This was due largely to

lower net payments of investment income (by 7.4 percent) on account

of reduced net payments of dividends and reinvested earnings on

foreign direct investments, along with the 6.4 percent increase in

compensation inflows from resident OF workers which amounted to

US$1.9 billion.

Secondary Income. Net receipts in the secondary income account

reached US$5.2 billion in Q1 2015, 2.8 percent higher than the

US$5 billion net receipts in Q1 2014. Growth was attributed mainly to

the 3.9 percent improvement in personal transfers totaling

US$4.8 billion. The bulk of these personal transfers came from

non-resident OF workers' remittances (about 98 percent), which

increased by 4.2 percent to US$4.7 billion. Sustained demand for

skilled Filipino manpower overseas and the initiatives of banks and

19 Include manufacturing services on physical inputs owned by others, mostly electronic products, and

BPOs pertaining mostly to contact centers, animation, and medical transcriptions. 20 Include BPOs pertaining to software publishing and development. 21 Based on BPM6, financial services consist of: a) explicitly charged and other financial services;

and b) financial intermediation services indirectly measured (FISIM). FISIM refers to margins between

interest payable and reference rate on loans and deposits. Government goods and services n.i.e. cover

goods and services: a) supplied by and to embassies, military bases and international organizations;

b) acquired from the host economy by diplomats, consular staff, and military personnel located abroad

and their dependents; and c) services supplied by and to governments and not included in other categories

of services.

Net receipts from

primary income

expand

Net receipts from

secondary income

increase



First Quarter 2015

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 steady inflow of remittances.

Capital Account. Net receipts in the capital account declined to

US$22 million in Q1 2015 from US$26 million in the same quarter last

year. Outflows arising from residents’ net acquisition of non-produced

non-financial assets from non-residents were higher during the

quarter.

Financial Account. The financial account posted net outflows

(or net lending by residents to the rest of the world) of US$606 million

in Q1 2015, lower by 85.2 percent than the US$4.1 billion net outflows

in Q1 2014. This was driven by the notable decline in net outflows of

portfolio investments (by 91.9 percent) and other investments

(by 99.6 percent). These lower net outflows, however, were offset by

the reversal of the direct investment account to net outflows from net

inflows during the quarter.

Direct Investments. Direct investments registered net outflows of

US$395 million in Q1 2015, a reversal of the US$487 million net

inflows posted in the same quarter last year. Residents’ net

acquisition of financial assets amounting to US$1.2 billion were

greater than their net incurrence of liabilities (foreign direct

investments in the Philippines or FDI) of US$851 million. In particular,

residents’ net placements of equity capital abroad increased by

83.1 percent to reach US$348 million while their placements in debt

instruments issued by non-residents (or intercompany borrowings)

declined by 13.5 percent (at US$873 million). Meanwhile, FDI during

the quarter were lower by 50.4 percent as non-residents’ net

placements in debt instruments decreased by 54.6 percent

Capital account

yields lower net

receipts

Net outflows in

the financial

account decline

Direct investments

reverse to net

outflows



First Quarter 2015

(at US$412 million) and their net placements in equity capital fell by

54 percent (at US$254 million). On gross basis, equity capital

placements came largely from the United States, Japan, Singapore,

Spain, and Germany. The funds were channeled primarily to

manufacturing; electricity, gas, steam and air conditioning supply; real

estate; financial and insurance; and wholesale and retail trade sectors.

Portfolio Investments. Net outflows in the portfolio investments

account amounted to US$227 million in Q1 2015, markedly lower

than the US$2.8 billion net outflows in the same quarter last year.

This developed as net incurrence of liabilities or foreign portfolio

investments totaled US$1.3 billion, a reversal of the US$1.6 billion net

repayment of liabilities in the same quarter in 2014. In particular, net

placements by non-residents in debt securities were posted during

the quarter at US$234 million in contrast to the net withdrawals of

US$1.9 billion a year ago. Moreover, net placements by non-residents

in equity and investment fund shares increased to US$1.1 billion from

US$351 million in the comparable period the previous year.

Favorable domestic developments, particularly the continued stable

inflation environment, higher-than-expected output growth in

Q4 2014, and healthy external payments position reflected improved

investor sentiment. Meanwhile, residents’ net acquisition of financial

assets increased by 25.8 percent to reach US$1.6 billion, boosted by

residents’ higher net placements in debt securities issued by

non-residents. Net placements by domestic deposit-taking

corporations and non-banks reached US$912 million and

US$606 million, respectively.

Financial Derivatives. The financial derivatives account posted a higher

net loss of US$22 million during the review quarter compared to

US$19 million in Q1 2014.

Trading in financial

derivatives yields

net loss

Portfolio

investments

account registers

lower net outflows



First Quarter 2015

Other Investments. The other investment account registered net

outflows of US$7 million in Q1 2015, a marked decline from the

US$1.8 billion net outflows recorded in the same quarter last year.

The outflows were due mainly to the net repayment of liabilities by

residents, particularly loans availed of by domestic deposit-taking

corporations from non-residents (US$3.0 billion). Meanwhile, the main

sources of inflows during the quarter were the net withdrawal of

foreign currency and deposits by residents (US$1.4 billion) and net

repayment by non-residents of loans availed from domestic

deposit-taking corporations (US$1.0 billion).

International Reserves

The GIR increased to US$80.5 billion as of end-March 2015, higher by

about US$1 billion relative to the previous quarter and US$0.8 billion

from the year-ago level (Table 12). The GIR level for the review period

remains adequate to cover 10.6 months’ worth of imports of goods and

payments of services and income. It is also equivalent to 6.1 times the

country’s short-term external debt based on original maturity and

4.6 times based on residual maturity.

GIR level rises

Net outflows of

other investments

drop

Gross International Reservesin million US dollars

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

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

2012 2013 2014 2015



First Quarter 2015

The increase in the level of reserves was due to the NG’S net foreign

currency deposits and the BSP’s foreign exchange operations and

income from investments abroad. These inflows were partially offset

by the payments made by the NG for its maturing foreign exchange

obligations and revaluation adjustments on the BSP’s gold holdings and

foreign currency-denominated reserves.

Of the total reserves as of end-March, 87.7 percent were held in

foreign investments. Gold comprised 9.2 percent of total while the

remaining 3.1 percent were in the combined 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$80.4 billion as of end-March, lower by US$0.9 billion from the level

in the previous quarter.

Exchange Rate

In the first quarter of 2015, the peso appreciated against the US dollar

by 0.9 percent to average P44.42/US$1 from the previous quarter’s

average of P44.81/US$1, and by 1.0 percent relative to the

P44.87/US$1 average in the first quarter of 2014 (Table 13).22

The strength of the peso during the review period was mainly on

account of further easing moves of major central banks, particularly,

the ECB’s expansion of its asset purchase programme, and the

US Federal Reserve’s stance that it can be patient in normalizing

monetary policy, which boosted the appeal of emerging market assets,

including the peso.

22 Dollar rates or the reciprocal of the peso-dollar rates were used to compute for the percentage change.

The peso appreciates



First Quarter 2015

In January 2015, the peso strengthened to average P44.60/US$1

relative to the P44.69/US$1 average in December 2014 reflecting

market optimism that declining oil prices will improve trade balances

in the region and the decision of the ECB to inject fresh funds into the

euro zone’s ailing economy, which prompted investors back to

emerging market assets, including the peso.23 In February, the peso

appreciated further to P44.22/US$1 as the weak manufacturing data

in the US, as well as the dovish statement from US Fed Chairman Janet

Yellen that the US Fed will be patient in raising interest rates (stressing

that the US labor market still showed weakness and inflation remains

low) dampened sentiments towards the US dollar.24 Meanwhile, in

March, the peso weakened to average P44.45/US$1 as the strong

US jobs data sparked speculation that the Fed may increase its policy

rate earlier than expected. 25

On a year-to-date basis, the peso appreciated against the US dollar by

0.04 percent on 31 March 2015 as it closed at P44.70/US$1, moving in

tandem with most Asian currencies except the Malaysian ringgit,

Indonesian rupiah, Singaporean dollar, Korean won, and Japanese yen

which depreciated vis-à-vis the US dollar.26

23 On 22 January 2015, the ECB announced an expanded asset purchase program. The program adds the

purchase of sovereign bonds to the ECB’s existing private sector asset purchase programmes to address

the risks of a too prolonged period of low inflation. The program will encompass the asset-backed

securities purchase program (ABSPP) and the covered bond purchase program (CBPP3), which were both

launched late last year. Combined monthly purchases will amount to €60 billion. They are intended to be

carried out until at least September 2016 and in any case until the Governing Council sees a sustained

adjustment in the path of inflation that is consistent with its aim of achieving inflation rates below, but

close to, 2% over the medium term. 24 The Institute for Supply Management (ISM) reported that national factory activity in the US fell to

53.5 index points from 55.1 index points a month ago. 25 Nonfarm payrolls rose 295,000 after increasing by a downwardly revised 239,000 in January. February

marked the 12th straight month that employment gains have been above 200,000, the longest such run

since 1994. The unemployment rate dropped 0.2 percentage points to 5.5%, the lowest reading since

May 2008, but largely reflected people dropping out of the labor force. (Source: US Bureau of Labor

Statistics) 26 Based on the last done deal in the afternoon.



First Quarter 2015

Meanwhile, volatility, as measured by the coefficient of variation (COV)

of the peso’s daily closing rates was higher at 0.7 percent during the

review quarter compared with 0.3 percent in the fourth quarter of

2014. Exchange rate volatility edged higher partly due to diverging

monetary policies in advanced economies.27

On a real trade-weighted basis, during the review quarter, the peso lost

external price competitiveness against the basket of currencies of all

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

developing countries (TPI-D) as the real effective exchange rate (REER)

index of the peso increased by 7.6 percent, 11.0 percent, and

5.1 percent, respectively, relative to the fourth quarter of 2014. 28,29

This developed due to the combined effects of the nominal

27 The coefficient of variation is computed as the standard deviation of the daily exchange rate divided by

the average exchange rates for the period. 28 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. 29 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.

Year-to-Date Appreciation/Depreciation of Asian Currencies Against the US Dollar

As of 31 March 2015; in percent

1.20

1.14

0.77

0.13

0.04

-0.33

-1.57

-3.56

-5.22

-5.55

-7 -6 -5 -4 -3 -2 -1 0 1 2 3

Thai Baht

New Taiwan Dollar

Indian Rupee

Chinese Yuan

Philippine Peso

Japanese Won

South Korean Won

Singaporean Dollar

Indonesian Rupiah

Malaysian Ringgit

Based on last done deal transaction (closing price) as of 4:00pm, Manila



First Quarter 2015

appreciation of the peso and widening inflation differential against

these currency baskets.

Similarly, relative to the first quarter of 2014, the peso lost external

price competitiveness against the basket of currencies of TPI, TPI-A,

and TPI-D as the peso appreciated in real terms by 9.3 percent,

14.6 percent, and 5.6 percent, respectively, due to the combined

effects of the peso’s nominal appreciation and positive inflation

differential against these currency baskets.

External Debt

Outstanding Philippine external debt stood at US$75.3 billion as of

end-March 2015, lower by US$2.4 billion (or 3.0 percent) from the

end-2014 level of US$77.7 billion (Table 14). Year-on-year, the debt

stock likewise reflected a decline of US$3.6 billion (or 4.6 percent) from

US$78.9 billion in March 2014.

The decline in the debt levels in Q1 2015 was attributed largely to the

US$2.0 billion net repayments, mainly by banks. Of this, US$3.1 billion

pertained to “Due to Head Office/Branches Abroad” (DTHOBA)

accounts of foreign bank branches as well as bills payable. Negative FX

revaluation (US$220 million) arising from the strengthening of the

US Dollar against other currencies and an increase in residents’

External debt stays

manageable



First Quarter 2015

cinvestments in Philippine debt papers (US$100 million) also

contributed to the decline in the debt stock.

Y-o-y, the decrease was due to: (a) negative FX revaluation

adjustments (US$2.2 billion); (b) net repayments (US$1.9 billion); and

(c) previous periods’ adjustments (negative US$220 million) due to

audit findings as well as late reporting of transactions. However, these

were mitigated by the rise in non-residents’ investments in Philippine

debt papers (US$704 million).

As of end-March 2015, the maturity profile of the country’s external

debt remained biased towards MLT accounts [i.e., those with original

maturities longer than one year] which represented 82.6 percent

(US$62.2 billion) of total external debt. This means that

FX requirements for debt payments are well spread out and, thus,

more manageable. Meanwhile, short-term (ST) loans [or those with

original maturities of up to one year] stood at US$13.1 billion,

accounting for the 17.4 percent balance of total external debt.

Public sector external debt, which comprised 52.0 percent of total debt

stock, declined slightly to US$39.1 billion from the US$39.3 billion

(50.7 percent of total debt) level as of end-2014 due mainly to negative

FX revaluation adjustments (US$209 million) as the US Dollar

strengthened against most currencies. Private sector debt, on the

other hand, stood at US$36.2 billion (48.0 percent of total external

debt), lower than US$38.3 billion a quarter ago due largely to the net

repayments of bank liabilities (US$2.9 billion).

The debt service ratio (DSR), which relates principal and interest

payments or debt service burden (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.



First Quarter 2015

The ratio improved further to 6.95 percent in March 2015 due to higher

receipts and lower payments during the year (Table 15). The DSB has

consistently remained well below the international benchmark range

of 20.0 to 25.0 percent.

The external debt ratio (a solvency indicator), or total outstanding debt

(EDT) expressed as a percentage of annual aggregate output (GNI),

continued to exhibit an improving trend and was recorded at

21.5 percent in Q1 2015 from 22.5 percent last quarter and 23.9

percent a year ago. The same trend was observed using GDP as

denominator, as the debt stock dropped by US$2.4 billion vis-à-vis the

5.2 percent growth of the Philippine economy in Q1 2015.

Foreign Interest Rates

The timing of exit from accommodative monetary policy in 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. The US which concluded its asset purchase program in October

2014 is set to lift interest rates this year once labor market conditions

and economic growth gain traction.

In Q1 2015, the US 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 after concluding its asset purchase program in

October 2014. Meanwhile, the US Fed maintained the target range for

the federal funds target rate between 0-0.25 percent.

However, the US Fed noted that it will be appropriate to raise the

target range for the federal funds rate when it has seen further

Monetary policy in AEs

remains accommodative

where recovery remains

fragile



First Quarter 2015

improvement in the labor market and if inflation will move back to its

2 percent objective over the medium term. As the US Fed maintained

its monetary policy stance, the US prime rate and discount rate

continued to average 3.25 percent and 0.75 percent, respectively,

during the review period. Meanwhile, the US Federal Fund rate

increased marginally to 0.097 percent in Q1 2015 from the

0.093 percent average reported in the previous quarter (Table 16).

The Monetary Policy Committee (MPC) of the Bank of England (BOE)

maintained its monetary policy settings, keeping the official bank rate

paid on KB reserves at 0.5 percent in Q1 2015. The MPC also decided

to maintain the stock of asset purchases financed by the issuance of

central bank reserves at £375 billion.

The Bank of Japan (BOJ), after shifting to quantitative and qualitative

monetary easing policy, adopted the monetary base control which

involved the change in the main operating target for its money market

operations (MMO) from the uncollateralized overnight call rate.

In Q1 2015, 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 annually Japanese government

bonds (JGBs) 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 will maintain its purchases

of commercial papers and corporate bonds until their outstanding

amounts reach 2.2 trillion yen and 3.2 trillion yen, respectively.

The Governing Council of the ECB decided to keep the interest rates on

the main refinancing operation, marginal lending facility, and interest

rate on deposit facility unchanged at 0.05 percent, 0.30 percent and

-0.20 percent, respectively.



First Quarter 2015

Meanwhile, the 90-day LIBOR and 90-day Singapore Interbank Offered

Rate (SIBOR) increased in Q1 2015 to 0.260 percent and 0.750 percent

from 0.236 percent and 0.425 percent, respectively, even as global

financial markets remained generally liquid (Table 16).

Global Economic Developments

In the first quarter of 2015, global economic activity was characterized

by moderate but uneven growth in most advanced and emerging

economies. Global labor market conditions showed signs of

improvement while inflation rates of advanced and emerging

economies generally declined.

The acceleration of US GDP to 2.7 percent in the first quarter of 2015,

from 2.4 percent in the previous quarter, reflected an upturn in

personal and government consumption expenditures and gross

investments.30

Growth of the euro area increased marginally to 1.0 percent during the

review quarter from 0.9 percent, a quarter ago, supported by the

strong performance of Italy, France, Cyprus, Spain, Slovakia, Portugal,

Latvia, and the Netherlands.31

Meanwhile, economic growth in Japan contracted further to

1.4 percent during the review quarter from 0.9 percent decline in the

fourth quarter on account of the decline in public investment and net

exports.32

Among emerging economies in Asia, Hong Kong, South Korea and

China posted a slowdown in output growth for the review quarter.

Hong Kong posted 2.1 percent GDP growth in the first quarter of 2015

30 US Bureau of Economic Analysis 31 Eurostat 32 Statistics Bureau of Japan



First Quarter 2015

from 2.4 percent a quarter ago on account of soft external demand.33

In South Korea, economic activity eased to 2.4 percent during the

review quarter from 2.7 percent in the previous quarter as the increase

in investment and consumption was not enough to offset a negative

contribution from net exports.34 In China, economic activity expanded

by 7.0 percent during the review quarter, slowing down from the

7.3 percent growth in the preceding quarter due to the decline in

manufacturing and property investment.35 In Singapore, however,

output growth expanded to 2.6 percent during the review quarter from

2.1 percent, a quarter ago, as the expansion in the wholesale and retail

trade and the construction sectors offset the decline in manufacturing

and the slowdown in the finance and insurance sector.36

In the ASEAN region, output growth accelerated in Thailand during the

review quarter. The Thai economy advanced 3.0 percent during the

review quarter, up from a 2.1 percent expansion in the previous

quarter, boosted by the growth in private spending and the surge in

public investment.37 Meanwhile, economic activity in Indonesia,

Malaysia and the Philippines rose at a slower pace during the review

quarter. The Indonesian economy grew by 4.7 percent in the first

quarter of 2015, down from a 5.0 percent expansion in the previous

quarter due to the decline in exports and a slowdown in government

consumption.38 In Malaysia, output growth advanced 5.6 percent

during the review quarter, moderating marginally from the 5.7 percent

expansion a quarter ago, on account of the decline in exports.39

The Philippine economy expanded 5.2 percent during the review

33 Census and Statistics Department, Hong Kong 34 Bank of Korea 35 National Bureau of Statistics of China 36 The Ministry of Trade and Industry, Singapore 37 National Economic and Social Development Board, Thailand 38 Statistics Indonesia 39 Bank Negara, Malaysia



First Quarter 2015

quarter, slowing from a 6.6 percent growth in the previous quarter,

due to the slowdown in government expenditure and exports.40

In terms of domestic prices of goods, the average inflation rates of

major advanced economies declined in the first quarter of 2015.

In the US, the inflation rate decreased to -0.1 percent during the review

quarter from 1.3 percent a quarter ago. Likewise, inflation rates in

Japan and the euro area decelerated to 2.3 percent and -0.3 percent

relative to 2.6 percent and 0.2 percent, respectively, a quarter ago.

Among emerging Asian economies, inflation rates in Hong Kong,

South Korea, Singapore, China, and India decelerated to 4.4 percent,

0.6 percent, -0.3 percent, 1.3 percent, and -1.8 percent, respectively

from 5.1 percent, 1.0 percent, -0.1 percent, 1.7 percent, and

0.3 percent, a quarter ago.

Global labor market conditions generally improved. The rate of

unemployment in the US eased to 5.6 percent from 5.7 percent in the

previous quarter. Similarly, in the euro area, unemployment rate

declined to 11.3 percent from 11.5 percent in the previous quarter.

In Japan, jobless rate remained unchanged at 3.5 percent. In Asia,

unemployment rate declined in Singapore to 1.8 percent from

1.9 percent a quarter ago. In South Korea, however, jobless rate inched

up to 3.7 percent during the review quarter from the previous

quarter’s 3.5 percent. Meanwhile, unemployment rate in Hong Kong

and China remained steady at 3.3 percent and 4.1 percent,

respectively, relative to the previous quarter. Most ASEAN countries

posted an increase in their unemployment rates.

40 Philippine Statistics Authority



First Quarter 2015

F. Financial Condition of the BSP

Balance Sheet

Based on the preliminary and unaudited statement of financial

condition of the BSP as of end-December 2014, total assets reached

P4,087.5 billion, 0.6 percent or P25.3 billion higher than the

quarter-ago level (Table 17). Relative to the end-December 2013 level,

the amount decreased by 2.7 percent or P114.6 billion.

The BSP’s liabilities increased by P29.9 billion or 0.7 percent, q-o-q, to

P4,043.2 billion, but eased by 2.8 percent or P118.2 billion relative to

the end-December 2013 level. Consequently, the BSP’s net worth

declined to P44.3 billion compared to the quarter-ago level of

P48.9 billion. The amount was, however, slightly higher by 8.7 percent

or P3.5 billion than the P40.8 billion posted at end-December 2013.

BSP’s net worth

improves y-o-y, but

eases q-o-q

-q

Macroeconomic Indicators in Selected Economies

in percent

Q2

2014

Q3

2014

Q4

2014

Q1

2015

Q2

2014

Q3

2014

Q4

2014

Q1

2015

Q2

2014

Q3

2014

Q4

2014

Q1

2015

G3

US 2.6 2.7 2.4 2.7 2.1 1.8 1.3 -0.1 6.2 6.1 5.7 5.6

Japan -0.4 -1.4 -0.9 -1.4 3.6 3.3 2.6 2.3 3.6 3.6 3.5 3.5

Euro area 0.8 0.8 0.9 1.0 0.6 0.4 0.2 -0.3 11.6 11.5 11.5 11.3

Emerging Asia

Hong Kong 2.0 2.9 2.4 2.1 3.7 4.8 5.1 4.4 3.1 3.3 3.3 3.3

South Korea 3.4 3.3 2.7 2.4 1.6 1.4 1.0 0.6 3.7 3.5 3.5 3.7

Singapore 2.3 2.8 2.1 2.6 2.3 0.9 -0.1 -0.3 2.0 1.9 1.9 1.8

China 7.5 7.3 7.3 7.0 3.0 2.3 1.7 1.3 4.1 4.1 4.1 4.1

India 5.7 5.3 n.a. n.a. 5.8 3.9 0.3 -1.8 n.a. n.a. n.a. n.a.

ASEAN

Indonesia 5.0 5.0 5.0 4.7 7.1 4.4 6.5 6.5 5.9 n.a. n.a. n.a.

Malaysia 6.5 5.6 5.7 5.6 3.3 3.0 2.8 0.7 3.0 3.1 2.8 3.1

Philippines 6.7 5.5 6.6 5.2 4.3 4.7 3.6 2.4 7.0 6.7 6.0 6.6

Thailand 0.9 1.0 2.1 3.0 2.5 2.0 1.1 -0.5 1.0 0.8 0.6 1.0

Vietnam 5.2 5.6 6.0 6.0 4.7 4.3 2.6 0.7 1.8 2.2 2.1 2.21

Unemployment ra te is the proportion (in percent) of the tota l number of unemployed to the tota l number of pers ons in the la bor force.

Source: Bloomberg

Country

Real GDP (Y-o-Y Growth Rate) Inflation (Quarterly Average) Unemployment 1



First Quarter 2015

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

Revaluation of International Reserves account, which amounted to

P41.7 billion in Q4 2014, an increase of 459.1 percent or P34.2 billion

from the previous quarter’s P7.5 billion.

Similarly, the BSP’s liabilities increased during the review period as the

unwinding of deposits, particularly from the BSP’s SDAs and Treasurer

of the Philippines account (TOP), was outpaced by the growth of the

Currency Issue account. In particular, issued currencies increased by

P215.0 billion to P929.5 billion from P714.5 billion a quarter ago.

On the other hand, deposits decreased by P184.8 billion to

P2,724.6 billion, notwithstanding, the increase in reserve deposits of

other depository corporations (ODCs) of about 7.9 percent or

P101.3 billion in the fourth quarter. The BSP raised RR by 1.0 percent

each in April and May 2014 as a proactive move to manage potential

risks that could arise from the strong growth in domestic liquidity.41

41 MB meetings on Monetary Policy dated 27 March 2014 and 8 May 2014

in billion pesos

2013

Dec Sep Dec

Assets 4,087.5 4,062.2 4,202.1

Liabilities 4,043.2 4,013.3 4,161.3

Networth 44.3 48.9 40.8

Balance Sheet of the BSP*

2014

* unaudited



First Quarter 2015

Income Statement

Based on preliminary and unaudited data, the BSP registered a net loss

of P6.0 billion for Q4 2014. The BSP, however, posted a lower loss from

operations of P11.3 billion when compared to last year’s P25.1 billion

(Table 18).

Total revenues for the Q4 2014 amounted to P14.1 billion, higher than

the P12.7 billion posted in the previous quarter, as interest income

increased by 14.4 percent from the previous quarter’s aggregate level.

Miscellaneous income, likewise, improved by 8.4 percent or

P0.4 billion, q-o-q.

Total expenditures amounted to P20.0 billion, P0.5 billion higher than

the level posted last quarter. The q-o-q increase in expenditures was

due mainly to higher cost of minting/printing of currency, interest

expense on NG deposits, loans and debt instruments, and other

expenses.

BSP posts a lower

net loss from

operations in 2014

in billion pesos

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

Revenues 10.524 12.961 12.690 14.082 50.257 15.239 20.830 10.426 10.081 56.576

Less: Expenses 15.097 16.010 19.433 19.961 70.501 23.261 20.634 21.985 19.034 84.914

Net Income Before Gain/Loss (-) on FX

Rate Fluctuations, Provisions for Income

Tax and Capital Reserves

-4.573 -3.049 -6.743 -5.879 -20.244 -8.022 0.196 -11.559 -8.953 -28.338

Add/Less: Gain/Loss (-) on FX Rate

Fluctuations8.978 -0.741 0.852 -0.153 8.936 -6.256 -0.290 8.758 3.386 5.598

Provision for Income Tax 0.000 0.000 0.000 0.000 0.000 0.000 1.718 0.486 0.108 2.312

Net Income Available for Distribution 4.405 -3.790 -5.891 -6.032 -11.308 -14.278 -1.812 -3.287 -5.675 -25.052

2014 2013

* unaudited/preliminary

Income Statement of the BSP*



First Quarter 2015

G. Challenges and Policy Directions

Global growth for 2015-2016, at 3.5 percent and 3.8 percent,

respectively, is expected to be soft and uneven.42 The US economic

recovery is gaining traction although mitigating this are the structural

weaknesses in the EU and Japan. Meanwhile, EMEs are facing more

subdued growth prospects owing largely to weak external demand.

In contrast, lower oil prices could provide a sizable boost to the global

economy.

Against the present global outlook, a key challenge to the Philippine

economy is the downside risks to external demand which could affect

the country’s export activity as growth in AEs remains uneven.

The recovery in the US could boost the country’s external balance

through export receipts and remittance inflows. However, this could

be moderated by the growth outlook for the EU and Japan, as well as

the relatively subdued prospects in EMEs, particularly China. In

addition, the global economy could enter a new mediocre era, should

the current low-growth conditions persist, which could drag down

external demand in the medium term.

The uneven growth prospects in AEs are also likely to reinforce

divergence in monetary policy. This could encourage further investors’

search for yield which could either lead to more capital inflows to EMs,

where yields remain generally higher, or capital outflows, as the appeal

of US assets increases due to favorable economic trends and the Fed’s

eventual tightening of monetary policy. Thus, EMs, including the

Philippines, could face a reversal in capital flows and exchange rate

pressures.

42 International Monetary Fund (2015). ‘World Economic Outlook.’ April 2015.



First Quarter 2015

Given the prospect of the US Fed’s normalization of monetary policy,

the Philippines could also face tighter financial conditions owing to

volatilities in the global financial markets. Financial market volatility

could affect real sector activity through bouts of heightened risk

aversion, sharp increases in long- term interest rates, tighter access to

external financing, and possible foreign exchange market pressures.

Heightened risk aversion could push down the prices of financial

assets, thereby generating negative wealth effects and

mark-to-market losses. Rising interest rates and tighter access to

external funding could make long-term credit more costly.

Nevertheless, the potential adverse impact of the Fed’s monetary

normalization on liquidity, interest rates, and capital flows could be

counterbalanced, although not completely offset, by the continued

monetary accommodation in the EU and Japan.

Meanwhile, the decline in international oil prices resulted in the

moderation of domestic inflation momentum. Like most oil-importing

countries, the Philippines stands to benefit from the significant decline

in oil prices which could lead to lower domestic inflation (both headline

and core) and increase in consumption and investment growth. Lower

oil prices likewise provide the BSP flexibility to keep policy rates at

current levels in support of economic growth. Moreover, the risk of a

demand-led deflation in the country is likely to be minimal since

domestic demand conditions remain firm, wages are rigid downwards

and inflation expectations are well anchored.

A critical domestic challenge moving forward is addressing structural

bottlenecks, particularly infrastructure challenges, to lift investment

and realize new growth sources. Efforts by the NG to ramp up spending

and accelerate infrastructure projects will help to raise potential



First Quarter 2015

output and thereby sustain the growth momentum of the economy.

Toward this end, the PPP initiative of the government is expected to

bridge the infrastructure gap. Moreover, NG has announced that

infrastructure expenditure will be equivalent to 4 percent of GDP in

2015.

Meanwhile, remittances and BPO revenues are expected to remain

significant sources of foreign exchange liquidity, which could provide a

buffer against funding pressures as well as help insulate domestic

demand. Also, with the adequate capitalization levels of the banking

sector and other prudent bank practices, the impact on capital of a

possible increase in banks’ non-performing loans will be manageable.

Moving forward, the BSP will continue to be data-dependent in its

assessment of evolving price and output developments to ensure that

the monetary policy stance remains consistent with ensuring price and

financial stability while supporting sustainable economic growth.

In addition, the BSP remains prepared to deploy a menu of policy

actions, as needed, to rein in inflation expectations even as previous

monetary responses continue to work their way through the economy.

The BSP is prepared to temper any adverse impact of possible capital

outflows on the domestic economy by ensuring adequate level of

liquidity in the financial markets during periods of heightened

uncertainty and increased risk aversion. While guarding against

speculative flows that could lead 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 reserves.

On banking regulation and supervision, the BSP intends to sustain the

reform momentum with a view to toughen its resilience against shocks

as well as to boost its role as a catalyst for durable long-term economic



First Quarter 2015

growth. Toward this end, the BSP continues to pursue measures to

strengthen corporate governance, enhance transparency, expand

financial products and markets, help develop market infrastructure,

and upgrade banking policies and guidelines. 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.

On a broader perspective, the BSP will further foster an enabling

environment to promote greater access to the financial system

through its financial inclusion programs.43 The BSP will continue to

educate the public and further hone their skills to make well-informed

economic and financial decisions. Moreover, the BSP has been

proactively promoting the development of microfinance since 2000,

as a flagship program in support of poverty alleviation. This includes

the Credit Surety Fund (CSF) Program – a credit enhancement scheme

– developed by the BSP that provides a surety cover in lieu of

acceptable collaterals for loans of micro, small and medium enterprises

(MSMEs) from banking institutions.

The BSP also remains proactive in ensuring the credibility of the

payments and settlements system with the continued enhancement of

its processes in accordance with international best practices and

development of the necessary infrastructure through the operation of

the Philippines’ real time gross settlement system or the PhilPaSS.

Finally, amidst the increasing interconnectedness of global financial

markets, the BSP will remain an active participant in regional and

43 To mainstream financial inclusion, the BSP has focused on three areas, namely: (1) broad access to credit

at reasonable rates through responsible and proportionate regulation that encourages market innovation;

(2) timely and relevant economic and financial learning activities; and (3) well-founded financial consumer

protection programs.



First Quarter 2015

international cooperation programs and fora, in order to reap the

benefits of collaborative engagement.



First Quarter 2015

Annex A

Banking Policies

Submission of Reports by Banks Acting as Underwriters, Brokers, Dealers and Transfer Agents

of Securities

The BSP is requiring universal, commercial and thrift banks to regularly report the licenses that

said banks have acquired from or are renewing with the Securities and Exchange Commission

(SEC) and other regulatory authorities to perform securities-related operations.

The enhanced reporting requirement will enable the BSP to keep track of what banks have been

authorized to do with respect to underwriting, brokering, dealing and transfer agency functions.

Together with the list of licenses, the banks shall also submit to the BSP their roster of personnel

authorized to perform underwriting functions and to act as securities sales persons or associated

persons.

The roster shall be accompanied by a certification stating that said personnel are duly licensed

to carry out securities operations under relevant laws. The certification shall be signed by the

bank’s president or an officer of equivalent rank.

With the introduction of universal banks in the early 1980s, the Philippines allowed banks to

combine investment banking and securities activities with the traditional commercial banking

function. However, banks are still required to secure appropriate licenses or accreditation for

their securities operations from agencies such as the SEC and the BTr. Additionally, commercial

banks and other banks have also played increasing roles in the securities market.

The reporting initiative underscores the importance of the licensing function to the

management of risks that may be faced by banks from their securities operations and to the

protection of the investments of their customers. Understanding and managing these risks are



First Quarter 2015

essential to fostering financial stability, which is a key policy objective of the BSP. (BSP Circular

No. 866 dated 7 January 2015)

Amendments to MORB Sec. X151 on the Activities and Services Allowable for Micro-Banking

Offices (MBOs) and Subsec. X151.5 on Branch Processing Fees

The BSP issued a measure that aims to bring financial services to unbanked areas of the country.

The regulation includes a waiver of processing fees for the establishment of branches in

unbanked areas, and an expansion of the allowable activities for MBOs. MBOs are scaled-down

offices that enable banks to establish presence at a relatively lower cost.

Together with the revised rule on branch processing fees, the new regulation widens the scope

of allowable activities and services that MBOs can provide. In addition to the disbursement and

release of proceeds of all types of microfinance loans, MBOs can now provide and service other

types of loans to microfinance clients such as educational loan, health loan and emergency loan,

among others. Interested banks may also apply for BSP approval to increase the limit for the

monthly average daily balance of micro-deposit accounts from the amount maximum of

P40,000.00, subject to certain requirements. The expanded services will still primarily cater to

the needs of the microfinance clients and the prudential requirements and operational controls

will be retained. (Circular No. 868 dated 26 January 2015)

Amendments to Appendix 6 (Reports Required of Banks) and Other Related Subsections of

the Manual of Regulations for Banks (MORB)

As part of BSP’s initiative to rationalize the reports required from banks, Appendix 6, an

appendix to Section x192 and pertinent subsections of the MORB are amended to delete or

revise some reports required to be submitted by banks and certain provisions of these

subsections. (Circular No. 870 dated 20 February 2015)



First Quarter 2015

Internal Control and Internal Audit

The BSP approved the revised guidelines on internal control and internal audit raising the bar of

control standards for BSP supervised financial institutions (FIs). The guidelines complement

other BSP initiatives to further strengthen the quality of governance in the industry and align

existing regulations with international standards and best practices.

The guidelines feature the fundamental elements of internal control namely, management

oversight and control culture; risk recognition and assessment; control activities; information

and communications; and monitoring activities and correcting deficiencies. These effectively

broaden the regulatory expectations on internal control from previously being limited only to

the implementation of basic internal control activities to promoting shared accountability of the

board and personnel at all levels in the control process. The MB recognizes though, that there

is no “one size fits all” internal control framework. As such, consistent with the principle of

proportionality, FIs are expected to adopt internal control frameworks that are suited to their

size, risk profile and complexity of operations.

The guidelines also cover the BSP’s expectations on the internal audit function, highlighting its

role in assessing and complementing operational management, risk management, compliance

and other control functions. FIs are generally allowed to outsource the internal audit function

to have access to certain areas of expertise or address resource constraints provided that the

scope of audit will not include areas that are covered by existing statutes on deposit secrecy.

The guidelines, however, clarified that arrangements where FIs that are part of group structures

will opt to establish an internal audit function centrally in the parent bank will not fall under the

outsourcing framework provided under existing regulations.

Finally, the qualifications of the head of the internal audit function were expanded so as to

consider professionals from disciplines outside of the accountancy profession. Certified Public

Accountants (CPAs) or Certified Internal Auditors (CIAs) are required for the head of the internal

audit function of a universal/commercial bank. On the other hand, the head of the internal audit

function of thrift, rural, and cooperative banks may be a graduate of any accounting, business,

finance, or economics course but should have the technical proficiency on the conduct of



First Quarter 2015

internal audit. Regardless of academic background, heads of the internal audit function of all

supervised FIs should meet the prescribed number of years of experience. (Circular No. 871

dated 5 March 2015)

Amendments to the Rules on Delivery of Securities

The BSP amended the rule on the delivery of securities by adding the use of a central securities

depository (CSD) as another option available to investors. The BSP specifically allowed the

“Name-on-Central Depository” facility to be compliant with previously issued Circular No. 392.

This provides greater flexibility to investors on where to place the securities they purchase for

safekeeping and to avail of auxiliary services from the CSD, should the investor desire. A CSD is

an entity authorized under the rules of the SEC and is considered by global best practices as a

key infrastructure in handling securities settlement.

Securities are lodged at the CSD in electronic form and referred to as book-entry system. Instead

of physical pieces of paper securities, an electronic form expedites the transfer of securities

between buyers and sellers. There are specific guidelines put in place to ensure the integrity of

the securities holdings as well as the manner in which securities are delivered against the

availability of payment.

The Name-on-Central Depository facility allows securities to be recorded at the CSD in the name

of individual investors. This provides added transparency for investors. This is in contrast to

being lodged in so-called “omnibus accounts” which aggregate the holdings of all investors but

without segregating the holdings of one investor from another.

Aside from allowing a CSD as an acceptable mode of delivery of securities, the revised rule

requires independence of third party custodians, securities registries and CSDs. Under the

independence provision, these entities must not belong to the financial conglomerate or

banking group that issued or sold the securities to investors which the CSD now holds in

compliance with Circular No. 392 as amended.



First Quarter 2015

This reform initiative is in line with the broader objective of the BSP to further enhance the

handling of securities for the protection of investors. This is essential to capital market

development and mitigates the potential build-up of systemic risks in the Philippine financial

system. (Circular No. 873 dated 25 March 2015)



First Quarter 2015

Annex B

Capital Market Reforms

Helping develop market infrastructure

The BSP enhanced rules on delivery of securities by adding the use of a CSD as another option

available to investors. The MB specifically allowed the “Name-on-Central Depository” facility to

be compliant with previously issued Circular No. 392. This provides greater flexibility to investors

on where to place the securities they purchase for safekeeping and to avail of auxiliary services

from the CSD, should the investor desire. A CSD is an entity authorized under the rules of the SEC

and is considered by global best practices as a key infrastructure in handling securities

settlement.

This reform initiative is in line with the broader objective of the BSP to further enhance the

handling of securities for the protection of investors. This is essential to capital market

development and mitigates the potential build-up of systemic risks in the Philippine financial

system.

The BTr signed a Memorandum of Agreement (MOA) with the BIR covering the Specials Repo

program, 44 a key initiative directed to developing the domestic fixed income market. The Specials

Repo will allow market players the ability to quote two-way prices for government securities.

The MOA will set out the proper tax treatment for the Specials Repo, as well as provide guidance

and basic parameters for its structure, operational mechanics and taxation-regulatory

compliance by potential market participants in the program. Under the MOA, the BIR and BTr will

cooperate to ensure proper monitoring of Repo transactions, directed to establishing audit and

surveillance trails and mechanisms to ensure tax assessments and collections in compliance with

tax regulations.

44 The Specials Repo transactions are being envisioned for the interbank/professional market participants. It will be governed by the Global Master

Repurchase Agreement (GMRA), an internationally accepted Repo master agreement developed jointly by the Securities Industry and Financial

Markets Association (SIFMA) and the International Capital Market Association (ICMA). Source: BTr Press Release, 9 January 2015



First Quarter 2015

Promoting investor confidence

The Insurance Commission (IC) issued the rules and regulations governing the merger and

consolidation of insurance companies under Circular Letter 2015-11. The Circular ensures that

the liabilities of the companies that will be absolved or dissolved in the merger or consolidation,

including existing policies, should be transferred or absorbed by the surviving or resulting

corporations.

The government continuous to encourage more mergers and consolidations to comply with the

increased capitalization requirement for insurance companies in the Philippines and at the same

time, to make local insurance companies competitive especially when the ASEAN integration

starts in 2016.

Enhancing transparency and corporate governance

The Philippine Dealing System Holdings Corporation (PDS Group) launched the Enhanced FX

Market Services on 9 January 2015. The trading platform was developed by the PDS Group and

Thomson Reuters Corporation, allowing market players to buy and sell peso and dollar “in a more

efficient way.” Under the previous platform, market players will have to call their broker before

posting whether they agree or disagree with a price. But with the new system, participants will

post their price in their terminals and the price shows up on the screen. The new trading platform

will lessen the time spent on “negotiating” and thus could result in more liquidity.

The SEC recommended all publicly listed companies to adopt best governance practices

including:

� The Chairman of the Board and the Chief Executive Officer (CEO) should be separate individuals;

� The Chairman of a publicly-listed company (PLC) should not have been the company’s CEO in

the last three years;

� Independent and non-executive directors should not hold more than five concurrent board

seats in PLCs;

� At least one female independent director should be elected;



First Quarter 2015

� The Notice of the Annual Stockholders Meeting should be released at least 28 days before the

meeting;

� The Audited Financial Reports should be release within 60 days from the end of the Fiscal year;

� The Nominating Committee should be comprised entirely of independent directors;

� The company should use professional search firms or external sources of candidates when

searching for candidates to the board of directors;

� The company should have a separate board level Risk Committee;

� Independent non-executive directors should make up at least 50 percent of the board of

directors;

� The term limit of its independent directors should be limited to nine years from the date of first

appointment; and

� The company’s reporting framework should be consistent with either the Global Reporting

Initiative (GRI) or International Integrated Reporting Council (IIRC).

1 GROSS NATIONAL INCOME AND GROSS DOMESTIC PRODUCT BY INDUSTRIAL ORIGIN

for periods indicated

in million pesos; at constant 2000 prices

2015

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

Agriculture, Hunting, Forestry and Fishing 172,589 161,891 158,832 205,666 178,074 161,608 159,353 207,550 179,142 167,048 155,268 216,366 182,051 3.2 -0.2 0.3 0.9 0.6 3.4 -2.6 4.2 1.6

Industry 479,160 510,299 481,188 560,796 534,313 563,612 518,583 602,617 563,087 614,797 559,181 657,628 594,259 11.5 10.4 7.8 7.5 5.4 9.1 7.8 9.1 5.5

Mining and Quarrying 18,074 27,258 13,829 12,885 18,460 27,353 14,524 12,558 20,117 27,935 15,127 13,295 21,554 2.1 0.3 5.0 -2.5 9.0 2.1 4.2 5.9 7.1

Manufacturing 342,235 338,489 323,524 391,463 374,755 373,357 352,194 438,607 400,802 414,742 378,608 472,363 424,355 9.5 10.3 8.9 12.0 7.0 11.1 7.5 7.7 5.9

Construction 67,760 89,095 86,503 104,904 89,489 104,750 89,937 99,932 90,397 112,245 101,681 117,827 94,432 32.1 17.6 4.0 -4.7 1.0 7.2 13.1 17.9 4.5

Electricity, Gas and Water Supply 51,091 55,457 57,331 51,544 51,609 58,152 61,928 51,519 51,771 59,876 63,766 54,142 53,918 1.0 4.9 8.0 0.0 0.3 3.0 3.0 5.1 4.1

Services 828,830 920,110 882,268 943,600 879,631 992,291 947,530 1,004,917 939,276 1,050,348 1,000,705 1,061,170 991,878 6.1 7.8 7.4 6.5 6.8 5.9 5.6 5.6 5.6

Transportation, Storage and Communication 118,204 126,028 106,004 126,620 120,154 134,793 113,082 137,386 129,949 144,074 118,974 143,565 141,104 1.6 7.0 6.7 8.5 8.2 6.9 5.2 4.5 8.6

Trade and Repair of Motor Vehicles, Motorcycles,

Personal and Household Goods 228,899 250,361 276,892 299,520 240,028 270,289 291,498 319,286 254,757 287,956 312,034 330,248 268,528 4.9 8.0 5.3 6.6 6.1 6.5 7.0 3.4 5.4

Financial Intermediation 100,641 116,821 102,054 107,271 118,743 128,810 114,434 118,696 125,519 136,690 124,033 129,243 130,957 18.0 10.3 12.1 10.7 5.7 6.1 8.4 8.9 4.3

Real Estate, Renting and Busines Activities 156,299 176,286 172,861 173,453 165,491 193,360 193,086 186,851 182,376 209,839 206,038 204,989 194,096 5.9 9.7 11.7 7.7 10.2 8.5 6.7 9.7 6.4

Public Administration and Defense;

Compulsory Social Security 61,891 78,198 69,572 65,209 64,481 81,907 72,940 62,996 68,556 82,918 70,795 70,172 68,706 4.2 4.7 4.8 -3.4 6.3 1.2 -2.9 11.4 0.2

Other Services 162,897 172,417 154,885 171,526 170,735 183,133 162,489 179,701 178,120 188,872 168,832 182,954 188,487 4.8 6.2 4.9 4.8 4.3 3.1 3.9 1.8 5.8

Gross Domestic Product 1,480,580 1,592,299 1,522,288 1,710,061 1,592,017 1,717,511 1,625,467 1,815,084 1,681,505 1,832,193 1,715,155 1,935,164 1,768,189 7.5 7.9 6.8 6.1 5.6 6.7 5.5 6.6 5.2

Net Primary Income 298,438 314,980 309,213 331,652 337,317 337,585 370,030 373,757 374,674 364,294 358,528 379,132 384,832 13.0 7.2 19.7 12.7 11.1 7.9 -3.1 1.4 2.7

Gross National Income 1,779,018 1,907,279 1,831,501 2,041,713 1,929,334 2,055,096 1,995,496 2,188,842 2,056,179 2,196,487 2,073,683 2,314,296 2,153,020 8.4 7.8 9.0 7.2 6.6 6.9 3.9 5.7 4.7

Note: Total may not add up due to rounding.

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.

Source of basic data: Philippine Statistics Authority (PSA)*

* Republic Act No. 10625 signed on 12 September 2013 mandated the reorganization of the Philippine Statistical System (PSS) and the creation of the PSA which merged the major statistical agencies engaged in primary data collection and compilation of secondary data, namely: National Statistics Office (NSO),

National Statistical Coordination Board (NSCB), Bureau of Agricultural Statistics (BAS) and Bureau of Labor and Employment Statistics (BLES).

2015Annual Change (in %)

2012 2013 20142013 2014

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

for periods indicated

in million pesos; at constant 2000 prices

2015

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

Household Final Consumption Expenditure 1,035,983 1,092,699 1,051,037 1,262,804 1,092,750 1,147,354 1,116,742 1,335,591 1,159,901 1,213,137 1,171,822 1,402,140 1,222,122 5.5 5.0 6.3 5.8 6.1 5.7 4.9 5.0 5.4

Government Final Consumption Expenditure 166,855 197,699 163,666 143,957 178,984 216,215 170,751 139,861 182,405 216,265 166,398 153,029 191,164 7.3 9.4 4.3 -2.8 1.9 0.0 -2.5 9.4 4.8

Capital Formation 230,730 230,404 303,660 399,924 326,841 304,916 387,305 468,841 368,527 330,285 386,668 482,866 412,165 41.7 32.3 27.5 17.2 12.8 8.3 -0.2 3.0 11.8

Fixed Capital 314,349 297,917 311,559 361,355 369,433 339,412 341,653 390,977 375,761 362,946 378,235 422,184 413,894 17.5 13.9 9.7 8.2 1.7 6.9 10.7 8.0 10.1

Construction 104,052 130,086 132,530 161,901 140,125 152,642 138,325 155,638 138,762 168,647 157,616 185,590 146,714 34.7 17.3 4.4 -3.9 -1.0 10.5 13.9 19.2 5.7

Durable Equipment 175,124 138,699 151,520 158,768 193,382 157,048 174,858 195,648 201,163 163,057 188,278 195,412 229,883 10.4 13.2 15.4 23.2 4.0 3.8 7.7 -0.1 14.3

Breeding Stock & Orchard Development 27,158 23,146 18,814 30,949 27,314 22,910 18,638 27,201 26,106 22,467 19,001 27,838 26,123 0.6 -1.0 -0.9 -12.1 -4.4 -1.9 1.9 2.3 0.1

Intellectual Property Products 8,016 5,986 8,695 9,736 8,610 6,812 9,832 12,490 9,731 8,775 13,340 13,343 11,175 7.4 13.8 13.1 28.3 13.0 28.8 35.7 6.8 14.8

Changes in Inventories -83,620 -67,513 -7,899 38,569 -42,592 -34,496 45,652 77,864 -7,234 -32,661 8,434 60,682 -1,729 49.1 48.9 678.0 101.9 -83.0 5.3 -81.5 -22.1 -76.1

Exports 774,617 876,859 774,933 627,881 716,209 822,217 841,988 644,454 807,442 887,453 943,915 727,143 815,568 -7.5 -6.2 8.7 2.6 12.7 7.9 12.1 12.8 1.0

Less: Imports 717,084 803,657 772,121 735,617 727,481 766,122 894,398 772,939 846,245 803,283 936,626 849,224 884,917 1.4 -4.7 15.8 5.1 16.3 4.9 4.7 9.9 4.6

Statistical Discrepancy -10,521 -1,704 1,113 11,112 4,715 -7,069 3,079 -725 9,476 -11,663 -17,022 19,209 12,087 144.8 -314.9 176.7 -106.5 101.0 -65.0 -652.9 2,750.1 27.5

Gross Domestic Product 1,480,580 1,592,299 1,522,288 1,710,061 1,592,017 1,717,511 1,625,467 1,815,084 1,681,505 1,832,193 1,715,155 1,935,164 1,768,189 7.5 7.9 6.8 6.1 5.6 6.7 5.5 6.6 5.2

Net Primary Income 298,438 314,980 309,213 331,652 337,317 337,585 370,030 373,757 374,674 364,294 358,528 379,132 384,832 13.0 7.2 19.7 12.7 11.1 7.9 -3.1 1.4 2.7

Gross National Income 1,779,018 1,907,279 1,831,501 2,041,713 1,929,334 2,055,096 1,995,496 2,188,842 2,056,179 2,196,487 2,073,683 2,314,296 2,153,020 8.4 7.8 9.0 7.2 6.6 6.9 3.9 5.7 4.7

Note: Total may not add up due to rounding.

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.


* Republic Act No. 10625 signed on 12 September 2013 mandated the reorganization of the Philippine Statistical System (PSS) and the creation of the PSA which merged the major statistical agencies engaged in primary data collection and compilation of secondary data, namely: National Statistics Office (NSO),

National Statistical Coordination Board (NSCB), Bureau of Agricultural Statistics (BAS) and Bureau of Labor and Employment Statistics (BLES).

2015Annual Change (in %)

20142012 2013 2014

2013

2 SELECTED LABOR, EMPLOYMENT AND WAGE INDICATORS

with

Region

VIII

without

Region

VIII

with

Leyte

without

Leyte

with

Leyte

without

Leyte

with

Leyte

without

Leyte

with

Region

VIII

without

Region

VIII

with

Region

VIII

without

Region

VIII

with

Leyte

without

Leyte

with

Leyte

without

Leyte

with

Leyte

without

Leyte

with

Region

VIII

without

Region

VIII

with

Region

VIII

without

Region

VIII

without

Leyte

Employment Status 1

Labor Force (in thousands) 40,834 38,913 40,906 40,057 41,178 40,351 41,172 40,396 41,022 39,088 39,387 41,588 41,231 41,322 40,050 40,090 41,144

Employed 37,940 36,137 37,819 37,011 38,175 37,390 38,537 37,793 38,118 36,286 36,418 38,664 38,453 38,839 37,310 37,455 38,429

Unemployed 2,894 2,776 3,087 3,046 3,002 2,961 2,635 2,603 2,905 2,801 2,969 2,924 2,778 2,483 2,740 2,635 2,716

Underemployed 7,934 7,464 7,251 7,096 7,340 7,169 6,961 6,789 7,371 6,912 7,103 7,027 7,049 7,279 6,870 6,548 6,879

Labor Force Participation Rate (%) 64.1 64.1 63.8 63.9 63.9 63.9 63.9 63.9 63.9 63.9 63.8 65.2 64.4 64.3 64.4 63.8 63.7

Employment Rate (%) 92.9 92.9 92.5 92.4 92.7 92.7 93.6 93.6 92.9 92.8 92.5 93.0 93.3 94.0 93.2 93.4 93.4

Unemployment Rate (%) 7.1 7.1 7.5 7.6 7.3 7.3 6.4 6.4 7.1 7.2 7.5 7.0 6.7 6.0 6.8 6.6 6.6

Underemployment Rate (%) 20.9 20.7 19.2 19.2 19.2 19.2 18.1 18.0 19.3 19.0 19.5 18.2 18.3 18.7 18.4 17.5 17.9

Overseas Employment (Deployed, in thousands) 471 495 464 406 1,836 513 468 439 225 1,645

Land-based 375 405 373 317 1,469 413 377 349 152 1,292

Sea-based 96 90 91 89 367 99 91 90 73 354

Strikes

Number of New Strikes 0 1 0 0 1 0 0 0 2 2

Number of Workers Involved 0 400 0 0 400 0 0 0 51 51

Nominal Daily Wage Rates 2 (in pesos)

Non-Agricultural

NCR 456.0 456.0 456.0 466.0 466.0 466.0 466.0 466.0 466.0 466.0 466.0

Regions Outside NCR 349.5 349.5 349.5 349.5 349.5 349.5 362.5 362.5 362.5 362.5 362.5

Agricultural

NCR

Plantation 419.0 419.0 419.0 429.0 429.0 429.0 429.0 429.0 429.0 429.0 429.0

Non-Plantation 419.0 419.0 419.0 429.0 429.0 429.0 429.0 429.0 429.0 429.0 429.0

Regions Outside NCR

Plantation 324.5 324.5 324.5 324.5 324.5 324.5 337.5 337.5 337.5 337.5 337.5

Non-Plantation 309.0 309.0 309.0 309.0 309.0 322.0 322.0 322.0 322.0 322.0 322.0

Real Daily Wage Rates 3

(in pesos), 2006=100

Non-Agricultural

NCR 363.4 361.3 359.3 362.4 362.4 361.0 356.5 354.6 356.5 356.5 354.1

Regions Outside NCR 265.4 262.6 260.4 256.8 256.8 255.9 261.7 259.3 260.2 260.2 259.3

Agricultural

NCR

Plantation 333.9 332.0 330.2 333.6 333.6 332.3 328.2 326.5 328.2 328.2 326.0

Non-Plantation 333.9 332.0 330.2 333.6 333.6 332.3 328.2 326.5 328.2 328.2 326.0

Regions Outside NCR

Plantation 246.4 243.8 241.8 238.4 238.4 237.6 243.7 241.4 242.3 242.3 241.4

Non-Plantation 232.7 230.9 226.9 224.1 224.1 230.3 226.9 225.0 224.7 224.7 224.4

Notes:1 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.

2 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.

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

p Preliminary

Sources of data: Philippine Overseas Employment Administration (POEA), National Wages and Productivity Commission (NWPC), National Conciliation and Mediation Board and Philippine Statistics Authority (PSA)*. * Republic Act No. 10625 signed on 12 September 2013 mandated the reorganization of the Philippine Statistical System (PSS) and the creation of the PSA which merged the major statistical agencies engaged in primary data collection

and compilation of secondary data, namely: National Statistics Office (NSO), National Statistical Coordination Board (NSCB), Bureau of Agricultural Statistics (BAS) and Bureau of Labor and Employment Statistics (BLES).

2013 2014 2015

Q1 Q2 Q3 Q4 Average/Total Q1 Q2 Q3 Q4 Average/Total Q1

3 CASH OPERATIONS OF THE NATIONAL GOVERNMENT

for periods indicated; in billion pesos

2015

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

Revenues 361.0 399.9 358.0 416.0 364.3 475.1 427.1 449.5 398.4 535.3 491.3 483.5 470.5 484.1

Tax 302.3 369.7 324.9 364.3 316.7 429.6 387.7 401.2 355.2 469.0 449.7 446.2 402.9 445.6

Non-tax 58.7 30.3 33.2 51.7 47.6 45.5 39.4 48.3 43.2 66.3 41.6 37.3 67.6 38.5

Expenditures 394.9 400.4 427.6 554.9 430.8 460.0 477.0 512.4 482.5 505.2 468.4 525.5 504.0 582.2

Interest Payments 98.5 51.5 95.2 67.6 98.3 58.8 101.0 65.3 103.1 56.6 97.7 63.8 100.6 100.6

Equity 0.0 0.9 0.0 20.4 0.2 0.1 0.2 10.9 0.1 0.3 0.8 0.5 0.1 1.0

Net Lending 3.2 8.5 10.4 5.4 -8.1 4.7 5.6 14.4 4.9 1.5 2.0 5.0 2.2 5.0

Subsidy 5.6 7.1 5.7 24.2 4.2 9.0 22.2 30.9 1.2 48.3 12.7 18.2 3.7 9.3

Allotment to LGUs 71.0 78.4 74.1 74.9 80.3 83.6 76.9 76.5 85.1 89.0 85.8 84.4 96.3 78.0

Tax Expenditures 7.3 7.6 3.4 14.1 0.6 11.2 2.6 4.6 0.1 12.3 0.7 12.9 5.6 1.2

Others 209.3 246.4 238.7 348.3 255.3 292.5 268.6 309.7 288.0 297.1 268.7 340.8 295.5 387.2

Surplus/Deficit (-) -33.9 -0.5 -69.6 -138.9 -66.5 15.2 -49.9 -62.8 -84.1 30.1 22.9 -42.0 -33.5 -98.1

Financing 1

162.5 12.2 91.2 272.3 -0.8 88.6 178.1 53.2 7.0 31.3 69.9 67.0 -4.0 144.2

External Borrowings 66.8 -5.7 -10.4 19.3 -49.3 -15.2 -11.6 -7.8 -4.2 -5.3 26.6 -4.6 22.6 39.6

Domestic Borrowings 95.7 17.9 101.6 253.0 48.5 103.8 189.6 61.0 11.2 36.6 43.3 71.6 -26.6 104.6

Total Change in Cash: Deposit/Withdrawal (-) 164.7 -23.9 -45.5 196.5 -182.2 85.9 142.1 20.1 -170.8 88.5 85.5 34.6 30.7 44.4

Budgetary 128.6 11.7 21.7 133.4 -67.3 103.8 128.1 -9.6 -77.1 61.5 92.8 25.0 -37.5 46.0

Non-Budgetary Accounts 2

36.1 -35.6 -67.1 63.1 -114.9 -17.9 14.0 29.7 -93.7 27.0 -7.4 9.6 68.2 -1.6

Note: Details may not add up due to rounding.1

Availment less repayment2

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.

Source of Data: Bureau of the Treasury (BTr)

2012 2013 2014 2015PROGRAM

5

4 CONSUMER PRICE INDEX IN THE PHILIPPINES (2006=100)

for periods indicated; quarterly averages

2015

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

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

Food, and Non-Alcoholic 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

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

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

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

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

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

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

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

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

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

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

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

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

2015

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

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

Food, and Non-Alcoholic 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

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


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


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



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

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

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


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


2015

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

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 2.4


Food Items 2.0 2.0 3.2 2.4 2.7 2.3 2.2 4.1 5.9 7.1 8.3 6.6 5.0


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


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



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 2.6

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

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


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



* Republic Act No. 10625 signed on 12 September 2013 mandated the reorganization of the Philippine Statistical System (PSS) and the creation of the PSA which merged the major statistical agencies

engaged in primary data collection and compilation of secondary data, namely: National Statistics Office (NSO), National Statistical Coordination Board (NSCB), Bureau of Agricultural Statistics (BAS)

and Bureau of Labor and Employment Statistics (BLES).

2012 2013

Quarter-on-Quarter Change (in percent)

Year-on-Year Change (in percent)

2012 2013 2014

2014

2012 2013 2014

4a CONSUMER PRICE INDEX IN THE NATIONAL CAPITAL REGION (2006=100)


2015

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

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


Food Items 132.7 133.0 136.5 136.3 135.9 135.7 137.6 141.0 142.8 144.9 149.0 149.5 149.4


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





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

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

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


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


2015

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

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

Food, and Non-Alcoholic 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

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


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


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



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

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

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


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


2015

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

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


Food Items 0.9 1.0 3.7 1.6 2.4 2.0 0.8 3.4 5.1 6.8 8.3 6.0 4.6


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


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



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

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

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


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







2013 2014

2012 2013

2012 2013 2014

2014

2012


4b CONSUMER PRICE INDEX IN AREAS OUTSIDE THE NATIONAL CAPITAL REGION (2006=100)


2015

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

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


Food Items 140.5 141.5 143.5 144.0 144.4 144.8 147.0 150.1 153.0 155.2 159.3 160.2 160.7


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





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

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

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


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


2015

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

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


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


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


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



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

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

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


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


2015

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

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


Food Items 2.2 2.1 3.1 2.5 2.8 2.3 2.4 4.2 6.0 7.2 8.4 6.7 5.0


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


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 -1.1



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

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

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 -0.1


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






2012 2013

2012 2013 2014

2014

2012 2013 2014



5 MONETARY INDICATORS 1

as of periods indicated; in billion pesos

2015

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

Q1 r

A. Liquidity

1. M4 (2 + 7) 5,621.1 5,814.4 5,756.7 6,252.7 6,204.4 6,836.0 7,323.2 8,054.2 8,215.0 8,351.9 8,523.1 9,050.8 9,006.6

2. M3: Broad Money Liabilities (3 + 6) 4,596.7 4,783.4 4,734.0 5,252.5 5,195.1 5,748.6 6,201.9 6,925.0 7,029.4 7,100.1 7,219.2 7,703.9 7,639.7

3. M2 (4 + 5) 4,368.2 4,535.6 4,543.6 5,013.3 4,973.7 5,523.3 5,988.2 6,693.6 6,795.8 6,864.3 6,949.3 7,396.3 7,336.5

4. M1: Currency Outside Depository Corporations and

Transferable Deposits (Narrow Money) 1,471.8 1,450.5 1,458.4 1,606.5 1,657.1 1,779.4 1,823.6 2,045.2 2,051.6 2,107.2 2,134.1 2,316.4 2,312.2

a. Currency Outside Depository Corporations

(Currency in Circulation) 476.9 468.0 469.7 558.7 541.5 525.5 521.1 640.3 586.2 580.3 588.0 713.7 658.8

b. Transferable Deposits (Demand Deposits) 994.9 982.5 988.8 1,047.8 1,115.6 1,253.9 1,302.5 1,404.8 1,465.4 1,526.9 1,546.1 1,602.6 1,653.5

5. Other Deposits Included in Broad Money 2,896.4 3,085.2 3,085.1 3,406.9 3,316.5 3,743.9 4,164.6 4,648.4 4,744.3 4,757.1 4,815.2 5,080.0 5,024.3

a. Savings Deposits 1,940.5 2,005.2 2,046.5 2,187.6 2,240.2 2,466.2 2,650.7 2,889.2 3,084.4 3,007.0 3,077.0 3,191.8 3,204.4

b. Time Deposits 956.0 1,080.0 1,038.6 1,219.3 1,076.3 1,277.7 1,513.8 1,759.2 1,659.8 1,750.1 1,738.1 1,888.2 1,819.8

6. Securities Other Than Shares Included in

Broad Money (Deposit Substitutes) 228.5 247.7 190.4 239.2 221.4 225.3 213.7 231.5 233.5 235.8 269.9 307.6 303.2

7. Transferable and Other Deposits in Foreign

Currency (FCDU Deposits - Residents) 1,024.5 1,031.0 1,022.7 1,000.1 1,009.3 1,087.4 1,121.3 1,129.2 1,185.6 1,251.7 1,303.9 1,346.8 1,366.9

8. Liabilities Excluded from Broad Money

(Other Liabilities) 2,501.1 2,469.5 2,692.0 2,409.5 2,645.3 2,200.4 1,923.2 1,509.5 1,693.2 1,708.6 1,791.6 1,754.4 1,856.5

B. Domestic Claims 4,878.5 5,083.0 5,135.1 5,414.0 5,598.6 5,643.4 5,677.7 5,988.7 6,332.0 6,473.9 6,605.5 7,053.0 6,987.6

1. Net Claims on Central Government 996.1 989.3 1,030.0 969.2 1,148.8 1,015.0 913.1 950.8 1,188.5 1,110.2 1,033.6 1,119.1 1,089.8

Claims on Central Government 1,467.8 1,430.2 1,426.0 1,559.4 1,567.0 1,536.2 1,574.5 1,638.8 1,735.0 1,733.2 1,738.6 1,862.7 1,855.3

Less: Liabilities to Central Government 471.8 440.9 396.0 590.2 418.2 521.2 661.4 688.0 546.5 623.1 705.0 743.7 765.5

2. Claims on Other Sectors 3,882.4 4,093.7 4,105.1 4,444.8 4,449.8 4,628.4 4,764.7 5,037.8 5,143.4 5,363.7 5,571.9 5,933.9 5,897.7

Claims on Other Financial Corporations 434.9 500.4 489.5 540.3 551.2 555.6 563.3 559.1 559.5 574.6 613.6 630.3 630.2

Claims on State and Local Government 71.5 70.3 70.9 71.0 72.5 72.4 73.0 74.7 73.3 71.9 70.5 71.5 70.4

Claims on Public Nonfinancial Corporations 277.6 305.2 284.4 280.3 281.7 278.8 273.1 266.4 265.1 271.2 268.0 269.3 272.0

Claims on Private Sector 3,098.4 3,217.8 3,260.3 3,553.1 3,544.6 3,721.7 3,855.2 4,137.7 4,245.5 4,446.0 4,619.8 4,962.9 4,925.2

C. Net Foreign Assets 3,243.7 3,201.0 3,313.7 3,248.2 3,251.0 3,393.0 3,568.7 3,575.0 3,576.3 3,586.6 3,709.1 3,752.1 3,875.6

1. Bangko Sentral ng Pilipinas 3,196.9 3,154.1 3,359.5 3,382.3 3,390.0 3,467.8 3,586.9 3,643.8 3,520.0 3,476.6 3,524.1 3,514.4 3,556.7

Claims on Non-Residents 3,272.2 3,226.5 3,431.0 3,452.0 3,458.7 3,540.2 3,661.7 3,719.8 3,597.3 3,551.7 3,599.6 3,587.4 3,627.4

Less: Liabilities to Non-Residents 75.3 72.5 71.5 69.7 68.7 72.4 74.8 76.0 77.3 75.1 75.4 73.0 70.7

2. Other Depository Corporations 46.8 46.9 -45.8 -134.1 -139.0 -74.7 -18.2 -68.8 56.3 110.0 185.0 237.7 318.9

Claims on Non-Residents 623.7 634.0 621.1 584.1 571.3 615.4 665.7 696.0 810.2 828.5 864.0 1,028.7 964.1

Less: Liabilities to Non-Residents 576.9 587.1 667.0 718.2 710.3 690.1 683.9 764.8 753.9 718.5 679.0 790.9 645.3

Note: Details may not add up due to rounding.1 Based on the Standardized Report Forms (SRFs), a unified framework for reporting monetary and financial statistics to the International Monetary Fund (IMF).

r Revised

Source: Bangko Sentral ng Pilipinas (BSP)

2012 2013 2014

6 SELECTED DOMESTIC INTEREST RATES

for periods indicated; in percent per annum

2015

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

Interbank Call Loans 4.3473 4.1610 3.9465 3.6832 3.0555 2.2794 2.0235 2.0155 2.0147 2.0618 2.3356 2.5384 2.5266

Savings Deposits 1.5180 1.2940 1.2910 1.2640 1.1130 0.8550 0.7330 0.6590 0.5370 0.6270 0.6460 0.7030 0.7170

Time Deposits (All Maturities) 2.7420 2.8370 2.7740 2.9340 2.3730 1.4430 1.1210 1.0850 0.9740 0.9870 1.0480 1.3470 1.3760

Manila Reference Rates (All Maturities) 1

5.0625 4.9375 4.5625 3.4375 3.0000 2.0000 1.5625 1.5000 1.2500 1.3125 1.3750 N.T. N.T.

Lending Rates

7.9840 8.0219 7.8091 7.5378 7.1142 6.9750 6.9732 6.6567 6.7287 6.8083 6.8860 6.7818 6.8698

5.6636 5.7576 5.5490 5.2894 4.8584 4.6800 4.5337 4.3396 4.3688 4.3417 4.3861 4.4397 4.5031

6.0510 5.7040 5.4840 5.4550 5.8420 5.7800 5.7880 5.6520 5.5000 5.4780 5.5350 5.5820 5.4280

Bangko Sentral Rates

6.5000 N.T. 5.7500 N.T. N.T. N.T. 5.5000 N.T. N.T. N.T. N.T. N.T. N.T.

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

4.2206 4.0000 3.8192 3.5000 3.5000 3.5000 3.5000 3.5000 3.5000 3.5000 3.7500 4.0000 4.0000

N.T. 4.0696 3.9512 3.6786 3.5847 3.5000 3.5000 3.5000 3.5000 3.5000 3.7500 4.0000 4.0000

4.1997 4.0000 3.8307 3.5757 3.5000 3.5000 3.5000 3.5245 3.5608 3.5460 3.7390 4.0515 4.0810

Rate on Government Securities

Treasury Bills, All Maturities 2.2200 2.4400 1.9870 0.7160 0.4740 0.6030 0.9280 0.1210 1.2880 1.5000 1.5000 1.5720 1.6910

1.8840 2.3340 1.4580 0.3450 0.0590 0.3860 0.6680 0.0010 1.0650 1.2740 1.2580 1.2860 1.4690

2.2080 2.3080 1.8250 0.6790 0.3000 0.5480 0.8970 0.0460 1.4000 1.5890 1.5820 1.7000 1.7290

2.6110 2.5310 2.2280 0.8270 0.7000 0.7550 1.0490 0.2270 1.5400 1.8630 1.8090 1.8250 1.9480

Government Securities in the Secondary Market 4

3 months 2.5212 2.3812 0.8038 0.4865 0.4021 1.9375 0.7313 0.4917 1.6917 1.3229 1.7104 2.5409 2.2714

6 months 2.5327 2.4885 1.2042 0.7885 0.4677 1.9854 1.0687 0.6000 2.0367 1.4938 1.9479 2.6432 2.5795

1 year 3.1665 2.6419 1.6885 0.9885 0.8729 2.1938 1.5646 0.9333 2.3125 1.8917 2.1729 2.6955 2.6886

2 years 3.3462 3.1385 2.7250 3.0577 2.5729 3.2271 2.8250 2.5208 2.7563 2.8542 2.9813 3.0568 3.1959

3 years 3.8038 3.9135 3.9077 3.8258 2.8625 3.3479 2.9875 2.9187 3.1650 2.8917 3.3833 3.4500 3.4136

4 years 4.7596 4.6462 4.4692 3.9865 2.9792 3.7229 3.4354 3.4521 3.3917 3.1750 3.5083 3.5705 3.5864

5 years 4.8250 5.1058 4.7096 4.1058 3.0708 3.7312 3.4750 3.7625 3.7479 3.9812 4.2146 3.6795 3.8273

7 years 5.1462 5.1673 4.8462 4.1385 3.2937 4.0917 3.7208 3.6850 3.8615 4.0292 4.1229 4.1475 3.8932

10 years 5.7962 5.9192 4.8962 4.4000 3.5292 4.2771 3.8437 3.8038 4.4562 4.1667 4.3475 4.3705 4.0614

20 years 6.0072 6.0227 5.8487 5.9692 3.8146 4.3042 4.2896 5.1875 5.3938 5.3750 5.3125 5.1727 4.9850

25 years 6.4469 6.3827 6.0454 5.8962 4.1396 5.4487 5.5792 5.6458 5.6354 5.4329 5.3750 4.9500 4.7659

2015

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

Interbank Call Loans 1.2473 1.2610 0.3465 0.6832 -0.1445 -0.4206 -0.3765 -1.3845 -2.0853 -2.3382 -2.3644 -1.0616 0.1266

Savings Deposits -1.5820 -1.6060 -2.3090 -1.7360 -2.0870 -1.8450 -1.6670 -2.7410 -3.5630 -3.7730 -4.0540 -2.8970 -1.6830

Time Deposits (All Maturities) -0.3580 -0.0630 -0.8260 -0.0660 -0.8270 -1.2570 -1.2790 -2.3150 -3.1260 -3.4130 -3.6520 -2.2530 -1.0240

Manila Reference Rates (All Maturities) 1

1.9625 2.0375 0.9625 0.4375 -0.2000 -0.7000 -0.8375 -1.9000 -2.8500 -3.0875 -3.3250 N.T. N.T.

Lending Rates

4.8840 5.1219 4.2091 4.5378 3.9142 4.2750 4.5732 3.2567 2.6287 2.4083 2.1860 3.1818 4.4698

2.5636 2.8576 1.9490 2.2894 1.6584 1.9800 2.1337 0.9396 0.2688 -0.0583 -0.3139 0.8397 2.1031

2.9510 2.8040 1.8840 2.4550 2.6420 3.0800 3.3880 2.2520 1.4000 1.0780 0.8350 1.9820 3.0280

Bangko Sentral Rates

3.4000 N.T. 2.1500 N.T. N.T. N.T. 3.1000 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.

1.1206 1.1000 0.2192 0.5000 0.3000 0.8000 1.1000 0.1000 -0.6000 -0.9000 -0.9500 0.4000 1.6000

N.T. 1.1696 0.3512 0.6786 0.3847 0.8000 1.1000 0.1000 -0.6000 -0.9000 -0.9500 0.4000 1.6000

1.0997 1.1000 0.2307 0.5757 0.3000 0.8000 1.1000 0.1245 -0.5392 -0.8540 -0.9610 0.4515 1.6810

Rate on Government Securities

Treasury Bills, All Maturities -0.8800 -0.4600 -1.6130 -2.2840 -2.7260 -2.0970 -1.4720 -3.2790 -2.8120 -2.9000 -3.2000 -2.0280 -0.7090

-1.2160 -0.5660 -2.1420 -2.6550 -3.1410 -2.3140 -1.7320 -3.3990 -3.0350 -3.1260 -3.4420 -2.3140 -0.9310

-0.8920 -0.5920 -1.7750 -2.3210 -2.9000 -2.1520 -1.5030 -3.3540 -2.7000 -2.8110 -3.1180 -1.9000 -0.6710

-0.4890 -0.3690 -1.3720 -2.1730 -2.5000 -1.9450 -1.3510 -3.1730 -2.5600 -2.5370 -2.8910 -1.7750 -0.4520

Government Securities in the Secondary Market 4

3 months -0.0788 -0.5188 -2.8962 -2.5135 -2.7979 -0.7625 -1.9687 -3.6083 -2.2083 -3.0771 -2.6896 -0.1591 -0.1286

6 months -0.0673 -0.4115 -2.4958 -2.2115 -2.7323 -0.7146 -1.6313 -3.5000 -1.8633 -2.9062 -2.4521 -0.0568 0.1795

1 year 0.5665 -0.2581 -2.0115 -2.0115 -2.3271 -0.5062 -1.1354 -3.1667 -1.5875 -2.5083 -2.2271 -0.0045 0.2886

2 years 0.7462 0.2385 -0.9750 0.0577 -0.6271 0.5271 0.1250 -1.5792 -1.1437 -1.5458 -1.4187 0.3568 0.7959

3 years 1.2038 1.0135 0.2077 0.8258 -0.3375 0.6479 0.2875 -1.1813 -0.7350 -1.5083 -1.0167 0.7500 1.0136

4 years 2.1596 1.7462 0.7692 0.9865 -0.2208 1.0229 0.7354 -0.6479 -0.5083 -1.2250 -0.8917 0.8705 1.1864

5 years 2.2250 2.2058 1.0096 1.1058 -0.1292 1.0312 0.7750 -0.3375 -0.1521 -0.4188 -0.1854 0.9795 1.4273

7 years 2.5462 2.2673 1.1462 1.1385 0.0937 1.3917 1.0208 -0.4150 -0.0385 -0.3708 -0.2771 1.4475 1.4932

10 years 3.1962 3.0192 1.1962 1.4000 0.3292 1.5771 1.1437 -0.2962 0.5562 -0.2333 -0.0525 1.6705 1.6614

20 years 3.4072 3.1227 2.1487 2.9692 0.6146 1.6042 1.5896 1.0875 1.4938 0.9750 0.9125 2.4727 2.5850

25 years 3.8469 3.4827 2.3454 2.8962 0.9396 2.7487 2.8792 1.5458 1.7354 1.0329 0.9750 2.2500 2.3659

1 Refers to the New Manila Reference Rates (MRR) 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.2 Refers to the weighted average interest rate of reporting commercial banks' interest incomes on their outstanding peso-denominated loans

3 Weighted average of transacted rates

4 End-of-period

5 Nominal interest rate less inflation rate

N.T. - No transactions

Source: Bangko Sentral ng Pilipinas

RR/P (Term) 3

Rediscounting

91-Days

182-Days

364-Days

High

Low

All Maturities 2

R/P (Overnight) 3

R/P (Term) 3

2012 2013 2014

RR/P (Term) 3

Rediscounting

REAL INTEREST RATES 5

RR/P (Overnight) 3

182-Days

364-Days

91-Days

RR/P (Overnight) 3

High

All Maturities 2

R/P (Overnight) 3

R/P (Term) 3

2012 2013 2014

Low

NOMINAL INTEREST RATES

7 NUMBER OF FINANCIAL INSTITUTIONS 1

as of period indicated

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

TOTAL 26,512 26,784 26,742 27,189 27,329 27,503 27,759 28,047 28,065 28,094 28,128 28,243

Head Offices 7,433 7,421 7,268 7,238 7,205 7,112 7,053 7,012 6,943 6,888 6,840 6,747

Branches/Agencies 19,079 19,363 19,474 19,951 20,124 20,391 20,706 21,035 21,122 21,206 21,288 21,496

A. BANKS 9,186 9,207 9,301 9,410 9,477 9,543 9,720 9,935 10,020 10,120 10,207 10,361

Head Offices 723 712 705 696 687 683 676 673 667 664 652 648


1. Universal and Commercial Banks 4,904 4,965 5,028 5,145 5,182 5,234 5,330 5,461 5,514 5,583 5,738 5,833

Head Offices 38 37 37 37 36 36 36 36 36 36 36 36


2. Thrift Banks 1,545 1,522 1,545 1,619 1,641 1,662 1,773 1,828 1,856 1,878 1,873 1,920

Head Offices 71 69 69 70 70 70 71 71 70 70 69 69


a. Savings and Mortgage Banks 1,007 1,003 1,020 1,052 1,072 1,085 1,150 1,199 1,219 1,242 1,248 1,280

Head Offices 28 28 28 28 28 28 28 28 28 28 28 28

Branches/Agencies 979 975 992 1,024 1,044 1,057 1,122 1,171 1,191 1,214 1,220 1,252

b. Private Development Banks 367 341 346 385 384 387 429 432 437 432 440 444

Head Offices 19 18 18 19 19 19 20 19 19 19 19 19

Branches/Agencies 348 323 328 366 365 368 409 413 418 413 421 425

c. Stock Savings and Loan Associations 144 150 151 154 157 162 166 168 171 175 154 165

Head Offices 21 20 20 20 20 20 20 20 19 19 18 18


d. Microfinance Banks 27 28 28 28 28 28 28 29 29 29 31 31

Head Offices 3 3 3 3 3 3 3 4 4 4 4 4


3. Rural Banks 2,737 2,720 2,728 2,646 2,654 2,647 2,617 2,646 2,650 2,659 2,596 2,608

Head Offices 614 606 599 589 581 577 569 566 561 558 547 543


B. NON -BANKING FINANCIAL INSTITUTIONS 17,326 17,577 17,441 17,779 17,852 17,960 18,039 18,112 18,045 17,974 17,921 17,882

Head Offices 6,710 6,709 6,563 6,542 6,518 6,429 6,377 6,339 6,276 6,224 6,188 6,099


1. Investment Houses 27 27 27 27 26 26 26 26 26 25 25 25

Head Offices 17 17 17 17 16 16 16 16 16 15 15 15


2. Finance Companies 46 85 85 87 87 87 87 87 88 88 88 88

Head Offices 20 20 20 20 20 20 20 20 20 20 20 20


3. Investment Companies 4 4 4 3 3 3 3 3 3 3 2 2

Head Offices 4 4 4 3 3 3 3 3 3 3 2 2


4. Securities Dealers/Brokers 14 13 13 13 13 13 13 13 13 13 13 13

Head Offices 14 13 13 13 13 13 13 13 13 13 13 13


5. Pawnshops 16,936 17,128 16,992 17,335 17,408 17,514 17,579 17,652 17,584 17,513 17,461 17,422

Head Offices 6,464 6,463 6,317 6,301 6,279 6,188 6,123 6,085 6,022 5,971 5,936 5,847


6. Lending Investors 1 1 1 1 1 1 1 1 1 1 1 1

Head Offices 1 1 1 1 1 1 1 1 1 1 1 1


7. Non-Stock Savings and Loan Associations 174 195 195 195 196 198 199 198 198 199 199 199

Head Offices 70 71 71 71 70 72 72 71 71 71 71 71


8. Private Insurance Companies 2

116 116 116 110 110 110 110 110 110 110 110 110

Head Offices 112 112 112 108 108 108 108 108 108 108 108 108


9. Government Non-Banks 4 4 4 4 4 4 4 4 4 4 4 4

Head Offices 4 4 4 4 4 4 4 4 4 4 4 4


10. Venture Capital Coporations 0 0 0 0 0 0 0 0 0 0 0 0

Head Offices 0 0 0 0 0 0 0 0 0 0 0 0


11. Credit Card Companies 3 3 3 3 3 3 3 3 3 3 3 3

Head Offices 3 3 3 3 3 3 3 3 3 3 3 3


12. Other Non-Bank with QBF 1 1 1 1 1 1 1 1 1 1 1 1

Head Offices 1 1 1 1 1 1 1 1 1 1 1 1


13. Electronic Money Issuer 0 0 0 0 0 0 3 4 4 4 4 4

Head Offices 0 0 0 0 0 0 3 4 4 4 4 4


14. Remittance Agent 0 0 0 0 0 0 1 1 1 1 1 1

Head Offices 0 0 0 0 0 0 1 1 1 1 1 1


15. Credit Granting Entities 0 0 0 0 0 0 9 9 9 9 9 9

Head Offices 0 0 0 0 0 0 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 office, which primarily engages in banking activities other than the acceptance of deposits and/or servicing of withdrawals thru tellers and other authorized personnel.2 Covers only the head offices and their foreign branches.


2012 2013 2014

8 TOTAL RESOURCES OF THE FINANCIAL SYSTEM 1


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

TOTAL 9,530.3 9,805.7 9,970.7 10,622.4 10,757.2 11,291.2 11,829.0 12,833.6 13,014.0 13,331.0 13,472.6 14,267.7 14,108.2p

Banks 7,464.3 7,671.4 7,866.9 8,357.9 8,419.4 8,931.3 9,463.1 10,311.8 10,446.9 10,603.6 10,735.3 11,533.0 11,373.5p

Universal and Commercial Banks 2

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

Thrift Banks 608.6 606.2 622.4 681.5 679.3 739.8 764.6 809.1 825.0 851.1 866.6 916.2 916.2a

Rural Banks 2

187.8 187.6 190.1 189.7 192.6 196.0 193.1 202.3 209.4 206.9 210.7 218.4 218.4a

Non-Banks 3

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 2,734.7 2,734.7a

Notes: Details may not add up to total due to rounding.1 Excludes the Bangko Sentral ng Pilipinas; amount includes allowance for probable losses

2 Data on rural banks are based on Consolidated Statement of Condition (CSOC) up to March 2010. Data from April 2010 onwards are based on Financial Reporting Package (FRP).

3 Data on non-banks are based on CSOC; include investment houses, finance companies, investment companies, securities dealers/brokers, pawnshops, lending investors, non-stock savings and loan associations,

credit card companies (which are under the BSP's supervision), and private and government insurance companies (i.e., SSS and GSIS).p preliminary

a As of end-December 2014

Source: Bangko Sentral ng Pilipinas (BSP)

201520142012 2013

9 RATIOS OF NON-PERFORMING LOANS (NPL) AND LOAN LOSS PROVISIONS (LLP) TO TOTAL LOANS OF THE BANKING SYTEM 1

as of periods indicated; in percent

Total

Universal

Banks and

Commercial

Banks

Thrift

Banks

Rural

BanksTotal

Universal

Banks and

Commercial

Banks

Thrift

Banks

Rural

BanksTotal

Universal

Banks and

Commercial

Banks

Thrift

Banks

Rural

BanksTotal

Universal

Banks and

Commercial

Banks

Thrift

Banks

Rural

Banks

(1)/(13) (2)/(14) (3)/(15) (4)/(16) (5)/(13) (6)/(14) (7)/(15) (8)/(16) (9)/(13) (10)/(14) (11)/(15) (12)/(16) (17)/(13) (18)/(14) (19)/(15) (20)/(16)

3.718 2.986 7.306 10.105 3.769 3.594 4.693 5.096

3.101 2.446 6.183 10.190 3.214 3.087 3.648 5.107

3.112 2.460 6.228 9.968 3.189 3.043 3.736 5.175

2.848 2.233 5.721 10.138 2.952 2.821 3.374 5.106

3.936 3.331 6.481 11.266 1.020 0.593 2.869 6.037 4.056 3.914 4.514 6.215

3.569 3.013 5.626 11.508 0.717 0.336 2.201 5.886 3.897 3.756 4.219 6.591

3.616 3.003 6.292 11.492 0.794 0.384 2.762 5.482 3.920 3.734 4.521 6.989

3.381 2.756 5.905 12.327 0.720 0.310 2.720 5.374 3.707 3.519 4.027 7.948

3.423 2.741 6.131 13.323 0.872 0.448 2.787 6.235 3.740 3.517 4.317 8.048

3.319 2.683 5.938 12.358 0.787 0.387 2.628 5.764 3.698 3.491 4.294 7.573

3.215 2.566 5.888 12.935 0.825 0.421 2.667 6.207 3.553 3.349 4.116 7.682

2.768 2.126 5.456 13.132 0.584 0.189 2.419 6.260 3.285 3.064 3.957 7.836

2.761 2.155 4.939 13.137 0.636 0.230 2.400 6.382 3.214 3.044 3.427 7.696

2.684 2.100 4.826 13.445 0.658 0.276 2.297 6.694 3.122 2.954 3.391 7.706

2.561 2.044 4.524 12.240 0.627 0.300 2.010 6.134 3.002 2.842 3.365 7.047

2.312 1.818 4.405 11.848 0.596 0.299 1.970 5.854 2.770 2.590 3.380 6.908

2.461p

1.950 4.541 11.848a

0.668p

0.362 2.016 5.854a

2.871p

2.695 3.404 6.908a

Note: Details may not add up to total due to rounding.1

Data include banks under liquidation, foreign office transactions and interbank loans2 Starting September 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 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 BSP Circular No. 772, there are no available data for gross NPLs and net NPLs earlier than 2012.p preliminary

a As of December 2014


Jun

Jun

Sep

2011

Mar

NPL/TOTAL LOANS 2

GROSS NPL/TOTAL LOANS 3

NET NPL/TOTAL LOANS 3 LLP/TOTAL LOANS

2012

Jun

Sep

Dec

Mar

Dec

2013

Mar

Jun

Mar

Dec

2014

Sep

Mar

Dec

2015

Sep

9 NON-PERFORMING LOANS (NPL), TOTAL LOANS AND LOAN LOSS PROVISIONS (LLP) OF THE BANKING SYSTEM 1


Total

Universal

Banks and

Commercial

Banks

Thrift

Banks

Rural

BanksTotal

Universal

Banks and

Commercial

Banks

Thrift

Banks

Rural

BanksTotal

Universal

Banks and

Commercial

Banks

Thrift

Banks

Rural

BanksTotal

Universal

Banks and

Commercial

Banks

Thrift

Banks

Rural

BanksTotal

Universal

Banks and

Commercial

Banks

Thrift

Banks

Rural

Banks

(1) = (2) + (3)

+ (4)(2) (3) (4)

(5) = (6) +

(7) + (8)(6) (7) (8)

(9) = (10) +

(11) + (12)(10) (11) (12)

(13) = (14) +

(15) + (16)(14) (15) (16)

(17) = (18) +

(19) + (20)(18) (19) (20)

120.159 82.410 25.911 11.838 3,231.753 2,759.938 354.660 117.155 121.812 99.197 16.645 5.970

109.087 74.143 22.746 12.198 3,518.199 3,030.631 367.867 119.701 113.081 93.548 13.420 6.113

109.152 74.326 22.699 12.127 3,507.179 3,021.051 364.469 121.659 111.858 91.944 13.618 6.296

106.154 71.938 21.953 12.263 3,726.799 3,222.105 383.731 120.963 110.025 90.903 12.946 6.176

146.384 106.354 26.090 13.940 37.938 18.918 11.550 7.470 3,718.776 3,192.496 402.540 123.740 150.828 124.968 18.170 7.690

140.828 102.098 24.360 14.370 28.273 11.393 9.530 7.350 3,945.951 3,388.091 432.990 124.870 153.769 127.269 18.270 8.230

144.050 103.420 25.830 14.800 31.624 13.224 11.340 7.060 3,983.461 3,444.161 410.520 128.780 156.158 128.598 18.560 9.000

142.990 100.610 26.530 15.850 30.440 11.310 12.220 6.910 4,228.600 3,650.760 449.260 128.580 156.770 128.460 18.090 10.220

143.537 99.357 26.930 17.250 36.558 16.245 12.240 8.073 4,193.756 3,625.043 439.240 129.473 156.867 127.487 18.960 10.420

144.662 100.912 27.840 15.910 34.309 14.569 12.320 7.420 4,358.461 3,760.891 468.830 128.740 161.171 131.291 20.130 9.750

145.933 100.638 28.895 16.400 37.455 16.497 13.088 7.870 4,539.580 3,922.085 490.705 126.790 161.277 131.338 20.199 9.740

135.544 90.509 27.729 17.306 28.591 8.050 12.291 8.250 4,896.950 4,256.963 508.199 131.788 160.874 130.440 20.107 10.327

138.494 93.323 27.057 18.114 31.885 9.939 13.146 8.800 5,015.414 4,329.734 547.791 137.889 161.173 131.790 18.771 10.612

139.830 94.798 27.165 17.867 34.263 12.437 12.931 8.895 5,209.026 4,513.288 562.850 132.888 162.645 133.317 19.088 10.240

138.706 96.181 26.049 16.476 33.958 14.129 11.572 8.257 5,415.045 4,704.656 575.778 134.611 162.569 133.708 19.375 9.486

134.830 93.055 25.373 16.402 34.739 15.289 11.346 8.104 5,832.377 5,117.884 576.057 138.436 161.573 132.542 19.468 9.563

141.060p

97.365 27.293 16.402a

38.313p

18.093 12.116 8.104a

5,731.331p

4,991.914 600.981 138.436a

164.567p

134.544 20.460 9.563a

Note: Details may not add up to total due to rounding.1

Data include banks under liquidation, foreign office transactions and interbank loans2 Starting September 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 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 BSP Circular No. 772, there are no available data for gross NPLs and net NPLs earlier than 2012.p preliminary

a As of December 2014


Dec

2015

Mar

Mar

Jun

Sep

Sep

Dec

2014

2013

Mar

Jun

Jun

Sep

Dec

Dec

2012

Mar

Mar

Jun

Sep

2011

NON-PERFORMING LOANS 2

GROSS NON-PERFORMING LOANS 3

NET NON-PERFORMING LOANS 3 TOTAL LOANS LOAN LOSS PROVISIONS (LLP)

10 STOCK MARKET TRANSACTIONS

volume in million shares; value in million pesos

2015

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

VOLUME 402,135 152,893 116,967 371,124 165,036 170,243 106,453 73,403 113,135 122,113 155,537 424,409 150,587

Financials 1,619 1,153 991 1,435 1,816 1,374 986 3,439 992 1,341 1,558 1,090 978

Industrial 31,503 13,358 16,362 81,440 18,622 35,931 15,350 10,863 12,328 13,115 13,644 25,346 10,913

Holding Firms 21,751 7,081 9,092 143,646 33,659 36,290 5,254 5,250 5,728 6,984 12,527 12,142 10,844

Property 25,507 18,145 14,137 18,676 22,018 16,991 19,350 10,129 12,053 22,136 20,366 15,629 12,138

Services 14,404 10,480 15,810 44,605 23,394 21,728 10,167 13,676 7,058 12,923 17,377 32,885 21,263

Mining and Oil 307,351 102,675 60,575 81,321 65,527 57,929 55,346 30,043 74,975 64,492 89,992 336,889 94,056

SME (in thousand shares) 123 21 242 1,296 322 232 285 302 317 1,120,339 71,577 421,612 393,244

ETF 1

(in thousand shares) 1,196 426 668 791 4,748 1,893

VALUE 502,081 445,648 359,916 464,066 623,382 781,005 587,512 554,284 457,085 535,924 548,203 588,908 641,594

Financials 74,929 60,289 51,589 96,175 101,570 98,628 77,285 64,828 65,888 73,681 69,826 68,898 74,595

Industrial 114,995 132,721 69,894 101,502 125,879 228,624 144,382 185,203 104,206 110,557 94,254 119,148 145,948

Holding Firms 106,954 104,977 87,474 101,073 167,320 187,192 135,005 116,194 121,554 120,483 131,683 126,267 174,325

Property 58,562 52,983 65,675 66,955 108,596 100,356 139,774 60,423 67,867 105,044 79,090 108,390 103,447

Services 78,837 59,064 67,397 81,772 91,228 150,765 81,066 119,723 83,835 96,404 143,589 137,725 111,491

Mining and Oil 67,803 35,614 17,885 16,579 28,786 15,438 9,997 7,791 13,688 22,756 29,113 24,360 27,328

SME (in thousand pesos) 526 83 1,088 10,707 2,677 1,354 3,633 3,452 5,312 6,927,918 557,346 3,581,718 4,226,414

ETF 1

(in thousand pesos) 118,184 42,130 72,183 90,521 539,579 234,748

Composite Index (end-of-period) 5,107.73 5,246.41 5,346.10 5,812.73 6,847.47 6,465.28 6,191.80 5,889.83 6,428.71 6,844.31 7,283.07 7,230.57 7,940.49

Note: Details may not add up due to rounding.1 Starting 2 December 2013, trading of an Exchange Traded Fund (ETF) commenced. ETF is an open-end investment company that trades its shares in the stock exchange.

Source: Philippine Stock Exchange

2012 2013 2014

11 PHILIPPINES: BALANCE OF PAYMENTS

in million US dollars

Q1 Q2 Q3 Q4 Q1 Q1 2015 p

Current Account 1,495 3,088 3,366 4,701 3,305 121.1

Export 23,645 27,082 27,349 26,802 25,368 7.3

Import 22,150 23,994 23,983 22,101 22,063 -0.4

Goods, Services, and Primary Income -3,522 -2,410 -2,403 -1,570 -1,853 47.4

Export 18,453 21,442 21,398 20,348 20,028 8.5

Import 21,975 23,852 23,800 21,919 21,881 -0.4

Goods and Services -3,588 -2,630 -2,673 -2,086 -2,161 39.8

Export 16,276 19,193 19,080 18,046 17,707 8.8

Import 19,864 21,822 21,753 20,132 19,868 -

Goods -5,414 -3,104 -3,621 -3,711 -4,694 13.3

Credit: Exports 10,154 13,669 12,595 11,340 10,408 2.5

Debit: Imports 15,568 16,773 16,216 15,051 15,103 -3.0

Services 1,826 475 948 1,625 2,534 38.8

Credit: Exports 6,122 5,524 6,485 6,706 7,299 19.2

Debit: Imports 4,296 5,049 5,537 5,080 4,765 10.9

Primary Income 66 220 270 516 308 368.4

Credit: Receipts 2,177 2,249 2,317 2,303 2,321 6.6

Debit: Payments 2,111 2,029 2,047 1,787 2,013 -4.6

Secondary Income 5,017 5,498 5,769 6,271 5,159 2.8

Credit: Receipts 5,192 5,641 5,951 6,454 5,340 2.8

Debit: Payments 175 142 183 183 181 3.8

Capital Account 26 26 22 28 22 -12.9

Credit: Receipts 28 28 28 30 29 4.8

Debit: Payments 2 2 6 3 7 211.3

Financial Account 4,098 696 810 4,480 606 -85.2

Net Acquisition of Financial Assets 4,243 2,607 1,893 7,242 288 -93.2

Net Incurrence of Liabilities 145 1,911 1,083 2,762 -318 -318.5

Direct Investment -487 -543 842 977 395 181.2

Net Acquisition of Financial Assets 1,229 1,114 2,270 2,377 1,246 1.4

Net Incurrence of Liabilities 1,715 1,657 1,428 1,400 851 -50.4

Portfolio Investment 2,811 -649 -903 1,202 227 -91.9

Net Acquisition of Financial Assets 1,239 532 -245 930 1,559 25.8

Net Incurrence of Liabilities -1,572 1,181 659 -271 1,332 184.8

Financial Derivatives -19 -7 9 -31 -22 -16.0

Net Acquisition of Financial Assets -72 -50 -74 -81 -56 22.0

Net Incurrence of Liabilities -53 -44 -83 -50 -34 35.7

Other Investment 1,793 1,895 863 2,332 7 -99.6

Net Acquisition of Financial Assets 1,848 1,011 -59 4,016 -2,461 -233.2

Net Incurrence of Liabilities 55 -884 -921 1,684 -2,467 -4,597.7

Net Unclassified Items -1,897 -2,087 -1,866 325 -1,845 2.8

Overall BOP Position -4,475 330 712 574 877 119.6

Debit: Change in Reserve Assets -4,464 320 723 563 888 119.9

Credit: Change in Reserve Liabilities 11 -11 11 -11 11 -1.4

Use of Fund Credits 0 0 0 0 0 --

Short-term 11 -11 11 -11 11 -1.4

Details may not add up to total due to roundingp

preliminary

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 trasactions (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).

Growth

Rates (in %)

2014 2015

12 INTERNATIONAL RESERVES

as of periods indicated; in million US dollars

Mar Jun Sep Dec Mar

Gross International Reserves 79,645 80,733 79,557 79,541 80,459

Gold 8,006 8,285 7,570 7,484 7,437

SDRs 1,308 1,308 1,255 1,226 1,168

Foreign Investments 68,991 69,890 68,936 69,960 70,565

Foreign Exchange 746 639 1,207 300 850

Reserve Position in the Fund 595 612 590 571 439

Net International Reserves 79,632 80,731 79,544 79,539 80,446


2014 2015

13 EXCHANGE RATES OF THE PESO

period averages; pesos per unit of foreign currency

2012 Ave 42.2288 0.5299 54.3079 66.9249 43.7274 33.8041 5.4441 13.6818 1.3595 0.0045 1.4282 0.0375 6.6925 11.2607 11.4975

Q1 43.0458 0.5439 56.4446 67.6303 45.4161 34.0552 5.5473 14.0628 1.3891 0.0048 1.4495 0.0381 6.8224 11.4784 11.7199

Jan 43.6191 0.5670 56.2828 67.6569 45.3095 34.0705 5.6185 13.9823 1.3818 0.0048 1.4524 0.0381 6.9078 11.6315 11.8760

Feb 42.6608 0.5448 56.4222 67.4003 45.7292 34.0289 5.5017 14.1129 1.3882 0.0047 1.4439 0.0380 6.7708 11.3759 11.6151

Mar 42.8574 0.5199 56.6288 67.8338 45.2096 34.0664 5.5216 14.0931 1.3975 0.0047 1.4523 0.0381 6.7884 11.4280 11.6687

Q2 42.7759 0.5342 54.9295 67.7274 43.1939 33.8580 5.5113 13.7539 1.3688 0.0046 1.4444 0.0371 6.7562 11.4065 11.6464

Apr 42.6998 0.5253 56.2914 68.4145 44.2003 34.1571 5.5012 13.9585 1.3841 0.0047 1.4492 0.0376 6.7706 11.3863 11.6256

May 42.8515 0.5375 54.8780 68.2662 42.7908 33.9592 5.5199 13.8470 1.3704 0.0046 1.4544 0.0370 6.7763 11.4266 11.6670

Jun 42.7765 0.5397 53.6192 66.5015 42.5907 33.4579 5.5130 13.4563 1.3518 0.0046 1.4297 0.0367 6.7218 11.4065 11.6467

Q3 41.8999 0.5331 52.4566 66.2201 43.5134 33.6078 5.4029 13.4270 1.3367 0.0044 1.4052 0.0370 6.5967 11.1732 11.4080

Jul 41.9054 0.5302 51.5881 65.3765 43.0925 33.2304 5.4033 13.2341 1.3250 0.0044 1.3981 0.0367 6.5779 11.1746 11.4095

Aug 42.0452 0.5349 52.0961 66.0660 44.0751 33.7009 5.4213 13.4950 1.3384 0.0044 1.4040 0.0372 6.6110 11.2120 11.4477

Sep 41.7490 0.5341 53.6856 67.2180 43.3724 33.8922 5.3843 13.5519 1.3467 0.0044 1.4135 0.0371 6.6012 11.1330 11.3668

Q4 41.1937 0.5085 53.4008 66.1217 42.7863 33.6952 5.3150 13.4833 1.3434 0.0043 1.4138 0.0378 6.5946 10.9847 11.2157

Oct 41.4521 0.5258 53.7545 66.6237 42.6505 33.8484 5.3477 13.5689 1.3515 0.0043 1.4173 0.0374 6.6094 11.0539 11.2860

Nov 41.1222 0.5082 52.7036 65.5939 42.7514 33.6142 5.3060 13.4464 1.3399 0.0043 1.4123 0.0378 6.5966 10.9656 11.1962

Dec 41.0067 0.4914 53.7443 66.1474 42.9570 33.6230 5.2914 13.4347 1.3388 0.0043 1.4117 0.0381 6.5778 10.9348 11.1648

2013 Ave 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 11.5567

Q1 40.7048 0.4415 53.7888 63.1776 42.2374 32.9032 5.2487 13.2149 1.3661 0.0042 1.3813 0.0376 6.5401 10.8542 11.0825

Jan 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 11.0736

Mar 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 11.0848

Q2 41.7823 0.4240 54.5772 64.1778 41.4094 33.4572 5.3834 13.6132 1.4007 0.0043 1.3999 0.0372 6.7891 11.1416 11.3761

Apr 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 11.2020

May 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 11.2440

Jun 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 11.6823

Q3 43.6839 0.4418 57.8769 67.6989 39.9615 34.4646 5.6328 13.4939 1.3890 0.0041 1.4636 0.0394 7.1312 11.6481 11.8936

Jul 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 11.8044

Aug 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 11.9425

Sep 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 11.9338

Q4 43.6138 0.4349 59.3340 70.6012 40.4698 34.9138 5.6254 13.6135 1.3771 0.0037 1.4773 0.0411 7.1590 11.6295 11.8747

Oct 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 11.7573

Nov 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 11.8586

Dec 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 Ave 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 12.0872

Q1 44.8710 0.4366 61.4964 74.2641 40.2572 35.3781 5.7833 13.6135 1.3749 0.0038 1.4824 0.0420 7.3582 11.9648 12.2171

Jan 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 12.2238

Mar 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 12.1953

Q2 44.1276 0.4319 60.5270 74.2594 41.1515 35.2354 5.6920 13.6430 1.3600 0.0038 1.4655 0.0429 7.0808 11.7660 12.0143

Apr 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 12.1542

May 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 11.9588

Jun 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 11.9300

Q3 43.7697 0.4217 58.0755 73.1424 40.5386 34.9972 5.6473 13.7205 1.3634 0.0037 1.4592 0.0427 7.0992 11.6706 11.9168

Jul 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 11.8342

Aug 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 11.9160

Sep 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 12.0001

Q4 44.8123 0.3928 56.0738 71.0263 38.4422 34.6484 5.7783 13.3542 1.3706 0.0037 1.4565 0.0413 7.2924 11.9437 12.2006

Oct 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 12.1967

Nov 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 12.2384

Dec 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 Q1 44.4238 0.3729 50.0889 67.3003 34.9928 32.7648 5.7283 12.2877 1.3613 0.0035 1.4089 0.0404 7.1220 11.8379 12.0949

Jan 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 12.1439

Feb 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 12.0397

Mar 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 12.1011


Singapore

Dollar

Hongkong

Dollar

Malaysian

Ringgit

Thailand

Baht

Indonesian

Rupiah

New

Taiwan

Dollar

Chinese

Yuan

Saudi

Rial

Emirati

Dirham

Australian

Dollar

South

Korean

Won

PeriodUS

Dollar

Japanese

YenEuro

Pound

Sterling

13a EXCHANGE RATES OF THE PESO

period averages; units of foreign currency per peso

2012 Ave 0.0237 1.8893 0.0184 0.0149 0.0229 0.0296 0.1837 0.0731 0.7358 221.5638 0.7003 26.6838 0.1495 0.0888 0.0870

Q1 0.0232 1.8410 0.0177 0.0148 0.0220 0.0294 0.1803 0.0711 0.7199 210.5101 0.6899 26.2748 0.1466 0.0871 0.0853

Jan 0.0229 1.7638 0.0178 0.0148 0.0221 0.0294 0.1780 0.0715 0.7237 207.7151 0.6885 26.2369 0.1448 0.0860 0.0842

Feb 0.0234 1.8355 0.0177 0.0148 0.0219 0.0294 0.1818 0.0709 0.7204 210.8434 0.6926 26.3125 0.1477 0.0879 0.0861

Mar 0.0233 1.9235 0.0177 0.0147 0.0221 0.0294 0.1811 0.0710 0.7156 212.9719 0.6886 26.2749 0.1473 0.0875 0.0857

Q2 0.0234 1.8723 0.0182 0.0148 0.0232 0.0295 0.1814 0.0727 0.7307 216.5841 0.6924 26.9511 0.1480 0.0877 0.0859

Apr 0.0234 1.9036 0.0178 0.0146 0.0226 0.0293 0.1818 0.0716 0.7225 214.2857 0.6900 26.6115 0.1477 0.0878 0.0860

May 0.0233 1.8606 0.0182 0.0146 0.0234 0.0294 0.1812 0.0722 0.7297 215.6863 0.6876 26.9939 0.1476 0.0875 0.0857

Jun 0.0234 1.8528 0.0187 0.0150 0.0235 0.0299 0.1814 0.0743 0.7398 219.7802 0.6995 27.2480 0.1488 0.0877 0.0859

Q3 0.0239 1.8759 0.0191 0.0151 0.0230 0.0298 0.1851 0.0745 0.7481 226.5843 0.7117 27.0445 0.1516 0.0895 0.0877

Jul 0.0239 1.8860 0.0194 0.0153 0.0232 0.0301 0.1851 0.0756 0.7547 224.9489 0.7153 27.2817 0.1520 0.0895 0.0876

Aug 0.0238 1.8694 0.0192 0.0151 0.0227 0.0297 0.1845 0.0741 0.7471 227.2727 0.7123 26.9122 0.1513 0.0892 0.0874

Sep 0.0240 1.8722 0.0186 0.0149 0.0231 0.0295 0.1857 0.0738 0.7425 227.5313 0.7075 26.9397 0.1515 0.0898 0.0880

Q4 0.0243 1.9683 0.0187 0.0151 0.0234 0.0297 0.1882 0.0742 0.7444 232.5766 0.7073 26.4650 0.1516 0.0910 0.0892

Oct 0.0241 1.9019 0.0186 0.0150 0.0234 0.0295 0.1870 0.0737 0.7399 232.3126 0.7056 26.7152 0.1513 0.0905 0.0886

Nov 0.0243 1.9679 0.0190 0.0152 0.0234 0.0297 0.1885 0.0744 0.7463 232.5581 0.7080 26.4329 0.1516 0.0912 0.0893

Dec 0.0244 2.0350 0.0186 0.0151 0.0233 0.0297 0.1890 0.0744 0.7469 232.8590 0.7084 26.2467 0.1520 0.0915 0.0896

2013 Ave 0.0236 2.2977 0.0178 0.0151 0.0244 0.0295 0.1829 0.0742 0.7230 245.5338 0.6997 25.8055 0.1451 0.0884 0.0866

Q1 0.0246 2.2665 0.0186 0.0158 0.0237 0.0304 0.1905 0.0757 0.7320 237.8384 0.7240 26.6305 0.1529 0.0921 0.0902

Jan 0.0246 2.1833 0.0185 0.0154 0.0234 0.0301 0.1903 0.0745 0.7381 237.3247 0.7137 26.1531 0.1528 0.0921 0.0902

Feb 0.0246 2.2870 0.0184 0.0159 0.0238 0.0304 0.1907 0.0761 0.7327 238.0952 0.7285 26.7344 0.1532 0.0922 0.0903

Mar 0.0246 2.3291 0.0189 0.0163 0.0238 0.0306 0.1906 0.0764 0.7253 238.0952 0.7299 27.0040 0.1527 0.0921 0.0902

Q2 0.0239 2.3609 0.0183 0.0156 0.0242 0.0299 0.1858 0.0735 0.7140 234.5069 0.7145 26.8586 0.1474 0.0898 0.0879

Apr 0.0243 2.3692 0.0187 0.0159 0.0234 0.0301 0.1887 0.0741 0.7060 236.4865 0.7250 27.2303 0.1504 0.0911 0.0893

May 0.0242 2.4438 0.0187 0.0158 0.0244 0.0302 0.1879 0.0731 0.7195 237.2881 0.7210 26.9162 0.1487 0.0908 0.0889

Jun 0.0233 2.2697 0.0177 0.0150 0.0247 0.0294 0.1809 0.0732 0.7164 229.7461 0.6976 26.4293 0.1430 0.0874 0.0856

Q3 0.0229 2.2638 0.0173 0.0148 0.0250 0.0290 0.1775 0.0741 0.7199 242.9752 0.6833 25.3944 0.1402 0.0859 0.0841

Jul 0.0231 2.2990 0.0176 0.0152 0.0252 0.0292 0.1789 0.0735 0.7168 232.0888 0.6905 25.9770 0.1415 0.0865 0.0847

Aug 0.0228 2.2300 0.0171 0.0147 0.0253 0.0290 0.1768 0.0746 0.7195 240.1130 0.6830 25.4567 0.1396 0.0855 0.0837

Sep 0.0228 2.2622 0.0171 0.0144 0.0246 0.0288 0.1769 0.0742 0.7235 256.7237 0.6764 24.7496 0.1396 0.0856 0.0838

Q4 0.0229 2.2997 0.0169 0.0142 0.0247 0.0286 0.1778 0.0735 0.7262 266.8148 0.6769 24.3383 0.1397 0.0860 0.0842

Oct 0.0232 2.2651 0.0170 0.0144 0.0244 0.0288 0.1796 0.0736 0.7220 262.1723 0.6805 24.6943 0.1414 0.0868 0.0851

Nov 0.0230 2.2954 0.0170 0.0143 0.0246 0.0286 0.1780 0.0733 0.7254 265.9574 0.6776 24.3813 0.1399 0.0861 0.0843

Dec 0.0227 2.3387 0.0166 0.0139 0.0252 0.0285 0.1758 0.0734 0.7311 272.3147 0.6728 23.9394 0.1378 0.0850 0.0833

2014 Ave 0.0225 2.3819 0.0170 0.0137 0.0250 0.0285 0.1747 0.0736 0.7315 267.1980 0.6823 23.7037 0.1388 0.0845 0.0827

Q1 0.0223 2.2904 0.0163 0.0135 0.0248 0.0283 0.1729 0.0735 0.7274 264.2513 0.6746 23.8233 0.1359 0.0836 0.0819

Jan 0.0223 2.3140 0.0163 0.0135 0.0251 0.0283 0.1727 0.0734 0.7322 270.9677 0.6703 23.7101 0.1347 0.0835 0.0818

Feb 0.0223 2.2745 0.0163 0.0135 0.0248 0.0282 0.1728 0.0737 0.7269 266.3116 0.6749 23.8692 0.1353 0.0835 0.0818

Mar 0.0223 2.2828 0.0161 0.0134 0.0246 0.0283 0.1733 0.0732 0.7229 255.4745 0.6785 23.8908 0.1377 0.0837 0.0820

Q2 0.0227 2.3152 0.0165 0.0135 0.0243 0.0284 0.1757 0.0733 0.7354 262.9928 0.6824 23.3247 0.1412 0.0850 0.0832

Apr 0.0224 2.2981 0.0162 0.0134 0.0240 0.0281 0.1737 0.0729 0.7239 255.7201 0.6769 23.3846 0.1394 0.0840 0.0823

May 0.0228 2.3180 0.0166 0.0135 0.0245 0.0285 0.1765 0.0735 0.7400 261.5193 0.6858 23.3281 0.1420 0.0854 0.0836

Jun 0.0228 2.3295 0.0168 0.0135 0.0244 0.0285 0.1769 0.0734 0.7422 271.7391 0.6845 23.2612 0.1423 0.0856 0.0838

Q3 0.0228 2.3718 0.0172 0.0137 0.0247 0.0286 0.1771 0.0729 0.7335 268.7751 0.6853 23.4344 0.1409 0.0857 0.0839

Jul 0.0230 2.3389 0.0170 0.0135 0.0245 0.0286 0.1783 0.0732 0.7390 269.9229 0.6886 23.4480 0.1427 0.0863 0.0845

Aug 0.0228 2.3485 0.0171 0.0137 0.0245 0.0285 0.1771 0.0727 0.7319 266.4797 0.6850 23.4308 0.1407 0.0857 0.0839

Sep 0.0227 2.4279 0.0176 0.0139 0.0250 0.0286 0.1759 0.0728 0.7295 269.9229 0.6824 23.4244 0.1393 0.0851 0.0833

Q4 0.0223 2.5501 0.0178 0.0141 0.0260 0.0289 0.1731 0.0749 0.7296 272.7728 0.6867 24.2326 0.1371 0.0837 0.0820

Oct 0.0223 2.4064 0.0176 0.0139 0.0254 0.0284 0.1732 0.0729 0.7240 270.2703 0.6783 23.6559 0.1368 0.0837 0.0820

Nov 0.0222 2.5810 0.0178 0.0141 0.0257 0.0288 0.1725 0.0743 0.7290 270.2703 0.6828 24.3576 0.1363 0.0835 0.0817

Dec 0.0224 2.6630 0.0181 0.0143 0.0270 0.0294 0.1735 0.0776 0.7359 277.7778 0.6990 24.6842 0.1384 0.0840 0.0822

2015 Q1 0.0225 2.6819 0.0200 0.0149 0.0286 0.0305 0.1746 0.0814 0.7346 287.6046 0.7098 24.7689 0.1404 0.0845 0.0827

Jan 0.0224 2.6570 0.0193 0.0148 0.0277 0.0300 0.1738 0.0802 0.7338 282.8619 0.7088 24.3937 0.1395 0.0842 0.0823

Feb 0.0226 2.6821 0.0199 0.0148 0.0290 0.0306 0.1754 0.0814 0.7366 287.0091 0.7134 24.9017 0.1413 0.0849 0.0831

Mar 0.0225 2.7067 0.0207 0.0150 0.0291 0.0310 0.1745 0.0826 0.7332 292.9427 0.7072 25.0114 0.1405 0.0844 0.0826


Singapore

Dollar

Hongkong

Dollar

Malaysian

Ringgit

Thailand

Baht

Indonesian

Rupiah

New

Taiwan

Dollar

Chinese

Yuan

Saudi

Rial

Emirati

Dirham

Australian

Dollar

South

Korean

Won

PeriodUS

Dollar

Japanese

YenEuro

Pound

Sterling

13b EFFECTIVE EXCHANGE RATE INDICES OF THE PESO

1980=100; period averages

Overall

Trading

Partners 1

Advanced

Trading

Partners 2

Developing

Trading

Partners 3

Overall

Trading

Partners 1

Advanced

Trading

Partners 2

Developing

Trading

Partners 3

2012 14.92 11.61 24.67 84.60 75.09 116.35

Q1 14.59 11.31 24.20 83.48 74.18 114.72

Jan 14.43 11.08 24.07 83.64 74.10 115.17

Feb 14.64 11.33 24.30 83.55 74.09 114.98

Mar 14.72 11.51 24.24 83.24 74.33 114.01

Q2 14.80 11.50 24.50 84.27 74.48 116.24

Apr 14.75 11.51 24.35 84.02 74.59 115.53

May 14.76 11.47 24.43 83.84 74.05 115.69

Jun 14.89 11.52 24.71 84.95 74.79 117.50

Q3 15.09 11.71 24.99 85.19 75.31 117.50

Jul 15.17 11.78 25.12 85.95 76.18 118.32

Aug 15.06 11.69 24.93 85.14 75.35 117.32

Sep 15.03 11.66 24.92 84.50 74.41 116.84

Q4 15.22 11.96 25.00 85.45 76.47 116.87

Oct 15.09 11.76 24.94 84.90 75.21 116.92

Nov 15.25 12.00 25.02 85.81 76.96 117.19

Dec 15.31 12.11 25.04 85.65 77.24 116.51

2013 15.26 12.38 24.45 87.44 81.57 115.85

Q1 15.69 12.63 25.29 90.88 84.84 120.34

Jan 15.53 12.43 25.14 91.17 84.88 120.98

Feb 15.72 12.65 25.35 90.71 84.77 120.01

Mar 15.82 12.82 25.37 90.76 84.87 120.03

Q2 15.53 12.68 24.77 89.32 83.61 118.04

Apr 15.71 12.81 25.07 90.41 84.80 119.30

May 15.75 12.96 24.97 90.39 85.15 118.89

Jun 15.14 12.27 24.27 87.15 80.87 115.93

Q3 14.95 12.13 23.97 84.81 78.90 112.59

Jul 15.08 12.29 24.09 85.75 80.37 113.22

Aug 14.88 12.02 23.92 84.33 78.11 112.32

Sep 14.89 12.07 23.89 84.35 78.23 112.25

Q4 14.92 12.12 23.88 85.00 79.20 112.71

Oct 14.97 12.11 24.04 85.06 78.90 113.18

Nov 14.94 12.15 23.90 85.09 79.45 112.66

Dec 14.85 12.10 23.72 84.84 79.26 112.29

2014 14.91 12.22 23.72 87.17 82.38 114.37

Q1 14.65 11.88 23.48 86.70 81.99 113.70

Jan 14.67 11.94 23.45 87.98 83.80 114.77

Feb 14.63 11.86 23.47 86.45 81.75 113.37

Mar 14.65 11.85 23.53 85.66 80.41 112.96

Q2 14.83 12.04 23.76 86.88 80.97 115.18

Apr 14.67 11.89 23.52 85.87 80.20 113.67

May 14.88 12.07 23.85 87.05 81.03 115.51

Jun 14.94 12.14 23.92 87.71 81.68 116.36

Q3 15.01 12.31 23.84 87.33 82.29 114.83

Jul 15.01 12.23 23.99 87.60 82.15 115.60

Aug 14.96 12.25 23.80 87.15 81.95 114.77

Sep 15.05 12.46 23.74 87.24 82.78 114.11

Q4 15.18 12.69 23.79 88.09 84.65 114.16

Oct 14.93 12.37 23.55 86.86 82.55 113.47

Nov 15.17 12.73 23.71 88.17 85.11 113.85

Dec 15.44 12.98 24.11 89.26 86.27 115.15

2015 15.81 13.40 24.52 94.79 93.93 120.03

Q1 15.81 13.40 24.52 94.79 93.93 120.03

Jan 15.63 13.20 24.30 95.04 94.17 120.35

Feb 15.86 13.42 24.62 94.95 94.04 120.28

Mar 15.94 13.58 24.63 94.39 93.58 119.46

1 Australia, Euro Area, US, Japan, Hong Kong, Taiwan, Thailand, Indonesia, Malaysia, Singapore, South Korea, China,

Saudi Arabia and UAE2

US, Japan, Euro Area and Australia

3 Hong Kong, Taiwan, Thailand, Indonesia, Malaysia, Singapore, South Korea, China, Saudi Arabia and UAE


N O M I N A L R E A L

14 TOTAL EXTERNAL DEBT

as of periods indicated; in million US dollars

Grand Total 2,486 13,762 61,426 77,674 2,764 10,333 62,222 75,319

Public Sector - 606 38,740 a 39,346 - 389 38,748 a 39,137

Banks - 606 3,542 4,148 - 389 3,484 3,872

Bangko Sentral ng Pilipinas - - 1,387 1,387 - - 1,332 1,332

Others - 606 2,155 2,761 - 389 2,152 2,541

Non-Banks - - 35,198 35,198 - - 35,265 35,265

CB-BOL - - - - - - - -

NG and Others - - 35,198 35,198 - - 35,265 35,265

Private Sector 2,486 13,156 22,685 38,327 2,764 9,944 23,474 36,182

Banks - 12,565 1,870 14,435 - 9,346 2,563 11,909

Foreign Bank Branches - 6,872 235 7,107 b - 5,205 310 5,514b

Domestic Banks - 5,693 1,635 7,328 - 4,142 2,254 6,395

Non-Banks 2,486 591 20,815 c 23,893 2,764 598 20,911 c 24,272

Inclusion: 31 Dec 2014 31 Mar 2015a

Cumulative foreign exchange revaluation on US dollar-denominated

multi-currency loans from Asian Development Bank and World Bank -61 -59b

Due to Head Office/Branches Abroad accounts of branches and

offshore banking units of foreign banks operating in the Philippines 5,329 3,932c

Obligations under various capital lease agreements; 1,015 1,014

Loans without BSP approval/registration 13,714 13,799


31 December 2014

Short-termMedium &

Long-TermTotal

Trade Non-Trade

31 March 2015

Short-termMedium &

Long-TermTotal

Trade Non-Trade

15 SELECTED FOREIGN DEBT SERVICE INDICATORS

for periods indicated; in million US dollars

Q1 Q2 Q3 Q4 Q1p

Debt Service Burden (DSB) 1

1,688 1,587 1,619 1,424 1,659

Principal 925 1,019 883 780 927

Interest 763 567 737 644 732

Export Shipments (XS) 3

10,154 13,669 12,595 11,340 10,408

Exports of Goods and Receipts

from Services and Income (XGSI) 2, 3

22,110 25,506 25,693 25,124 23,888

Current Account Receipts (CAR) 3

23,645 27,082 27,349 26,802 25,368

Gross National Income (GNI) 79,126 86,354 84,706 95,035 83,801

RATIOS (%):

DSB to XS 16.62 11.61 12.86 12.56 15.94

DSB to XGSI 7.63 6.22 6.30 5.67 6.95

DSB to CAR 7.14 5.86 5.92 5.31 6.54

DSB to GNI 2.13 1.84 1.91 1.50 1.98

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

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.3 Based on the accounting principle under the Balance of Payments and International Investment Position Manual, Sixth Edition (BPM6)

p preliminary


2014 2015

16 SELECTED FOREIGN INTEREST RATES

period averages; in percent

2015

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

US Prime Rate 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500 3.2500

US Discount Rate 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500 0.7500

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

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

SIBOR 1 (90 days) 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

1 SIBOR data refers to SIBOR rates in Singapore dollar

Source: Bloomberg, Asian Wall Street Journal, Reuters

20132012 2014

17 BALANCE SHEET OF THE BANGKO SENTRAL NG PILIPINAS


Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec u/p

Assets 3,727.9 3,684.2 3,889.7 3,975.9 4,049.0 4,091.3 4,148.2 4,202.1 4,040.9 4,028.2 4,062.2 4,087.5

International Reserves 3,248.1 3,202.9 3,408.2 3,424.3 3,416.3 3,494.4 3,613.9 3,670.0 3,545.2 3,500.3 3,547.2 3,535.8

Foreign Exchange Receivable 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Domestic Securities 219.0 217.3 220.3 218.1 220.9 219.8 221.5 219.5 219.0 222.0 222.0 222.4

Loans and Advances 115.8 119.4 116.5 118.5 108.7 101.1 97.2 94.5 85.6 85.2 85.0 85.3

Revaluation of International Reserves 0.0 0.0 0.0 64.6 131.4 92.5 32.2 32.6 0.0 26.1 7.5 41.7

Bank Premises and Other Fixed Assets 15.6 16.1 16.3 16.5 16.4 17.5 17.6 17.7 17.7 17.8 18.1 18.1

Derivative Instruments in a Gain Position 0.5 0.3 0.2 1.5 0.3 5.2 1.0 0.4 0.0 -0.1 0.7 0.1

Derivative Asset 0.7 0.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other Assets 128.3 127.4 128.2 132.4 155.1 160.8 164.8 167.4 173.3 177.0 181.8 184.0

Liabilities 3,606.3 3,582.7 3,815.1 3,911.4 3,996.6 4,041.7 4,100.3 4,161.3 3,985.3 3,973.5 4,013.3 4,043.2

Currency Issue 576.2 555.5 559.6 692.7 653.2 626.6 633.9 797.5 708.0 705.0 714.5 929.5

Deposits 2,630.2 2,657.2 2,851.6 2,854.5 2,977.4 3,038.5 3,087.6 2,978.4 2,855.2 2,883.2 2,909.4 2,724.6

Reserve Deposits of Other Depository Corporations (ODCs) 1

680.2 716.6 724.7 782.6 836.3 913.6 987.7 1,128.3 1,116.4 1,251.3 1,285.5 1,386.7

Reserve Deposits of Other Financial Corporations (OFCs) 2

0.6 0.3 0.3 0.3 0.4 0.4 0.4 0.5 0.5 3.2 4.1 7.7

Special Deposit Accounts 3

1,577.1 1,572.3 1,826.3 1,640.1 1,869.5 1,710.5 1,554.3 1,367.3 1,332.4 1,163.0 1,066.3 845.0

Treasurer of the Philippines 4

293.9 259.7 214.3 340.9 193.6 339.4 476.8 412.3 333.6 390.1 476.7 415.2

Other Foreign Currency Deposits 3.5 23.6 15.8 20.5 7.4 0.0 0.1 0.0 0.1 0.0 0.0 0.0

Foreign Financial Institutions 43.0 40.3 40.3 40.3 40.3 37.2 36.1 35.5 35.5 39.7 39.5 39.5

Other Deposits 5

31.9 44.4 29.9 29.8 29.8 37.4 32.3 34.5 36.9 35.8 37.4 30.4

Foreign Loans Payable 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0

Net Bonds Payable 21.9 21.1 21.3 20.5 20.9 21.6 22.2 22.2 22.9 21.8 22.9 22.4

Derivative Instruments in a Loss Position 3.9 5.8 0.9 0.6 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Derivatives Liability 0.3 0.3 0.2 0.1 0.2 0.0 0.0 0.0 0.0 0.1 0.0 0.0

Allocation of SDRs 55.7 53.8 53.9 52.9 51.4 54.5 56.0 57.3 58.0 56.5 55.8 54.3

Revaluation of International Reserves 50.7 4.8 38.9 0.0 0.0 0.0 0.0 0.0 33.6 0.0 0.0 0.0

Reverse Repurchase Agreements 3

256.6 274.1 277.8 278.5 282.7 288.7 289.6 293.9 296.5 296.3 299.1 302.3

Other Liabilities 10.7 10.0 10.9 11.5 10.6 11.6 10.9 12.0 10.9 10.5 11.5 10.0

Net Worth 121.6 101.5 74.6 64.5 52.4 49.6 47.9 40.8 55.6 54.7 48.9 44.3

Capital 20.0 20.0 20.0 40.0 40.0 40.0 40.0 40.0 50.0 50.0 50.0 50.0

Surplus/Reserves 101.6 81.5 54.6 24.5 12.4 9.6 7.9 0.8 5.6 4.7 -1.1 -5.7

Note: Details may not add up to totals due to roundingu Unaudited/Preliminary. Starting with end-December 2005, BSP financial statements have been prepared in compliance with some of the requirements of the Philippine Financial Reporting Standards (PFRS) and Philippine Accounting Standards (PAS),

both of which have been aligned with the International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS).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


2012 2013 2014

18 INCOME POSITION OF THE BANGKO SENTRAL NG PILIPINAS

for periods indicated; in billion pesos

Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 r

FY r

Q1 Q2 Q3 Q4 u/p

FY u/p

Revenues 17.223 17.851 15.279 15.376 65.729 15.239 20.830 10.426 10.081 56.576 10.524 12.961 12.690 14.082 50.257

Interest Income 10.485 10.161 10.145 10.125 40.916 7.923 7.640 8.986 7.878 32.427 7.656 7.908 8.266 9.453 33.283

International Reserves 8.202 7.511 7.502 7.598 30.813 6.092 5.545 5.753 6.019 23.409 5.966 6.045 6.121 6.900 25.032

Domestic Securities 0.984 1.206 1.282 1.025 4.497 0.523 0.387 0.524 0.457 1.891 0.297 0.501 0.792 0.856 2.446

Loans and Advances 0.741 0.774 0.791 0.905 3.211 0.668 0.906 1.828 0.560 3.962 0.513 0.438 0.426 0.721 2.098

Others 0.558 0.670 0.570 0.597 2.395 0.640 0.802 0.881 0.842 3.165 0.880 0.924 0.927 0.976 3.707

Miscellaneous Income 6.647 7.539 4.957 5.097 24.240 6.960 12.676 1.056 1.912 22.604 2.724 4.767 4.159 4.510 16.160

Net Income from Branches 0.091 0.151 0.177 0.154 0.573 0.356 0.514 0.384 0.291 1.545 0.144 0.286 0.265 0.119 0.814

Expenses 28.302 27.115 27.727 27.544 110.688 23.261 20.634 21.985 19.034 84.914 15.097 16.010 19.433 19.961 70.501

Interest Expenses 24.492 22.028 22.793 21.449 90.762 18.989 13.458 13.561 13.521 59.529 11.131 10.646 11.982 12.478 46.237

Legal Reserve Deposits of Banks 1.640 0.697 0.006 0.005 2.348 0.006 0.005 0.006 0.006 0.023 0.006 0.006 0.002 0.000 0.014

National Government Deposits 0.944 1.385 1.331 2.029 5.689 1.291 0.743 1.822 2.057 5.913 1.180 1.383 2.076 2.199 6.838

BSP Debt Instruments 2.443 2.392 2.666 2.519 10.020 2.487 2.533 2.581 2.603 10.204 2.605 2.619 2.761 3.073 11.058

Special Deposit Accounts 18.960 17.051 18.300 16.444 70.755 14.751 10.522 8.651 7.492 41.416 6.932 6.149 6.637 6.528 26.246

Loans Payable and Other Foreign Currency Deposits 0.483 0.474 0.465 0.450 1.872 0.453 0.496 0.479 0.497 1.925 0.505 0.474 0.494 0.669 2.142

Other Liabilities 0.022 0.029 0.025 0.002 0.078 0.001 -0.841 0.022 0.866 0.048 -0.097 0.015 0.012 0.009 -0.061

Cost of Minting/Printing of Currency 0.951 1.175 1.224 2.219 5.569 1.121 1.620 1.252 1.773 5.766 0.924 1.467 1.484 2.889 6.764

Taxes and Licenses 0.301 0.260 0.272 0.236 1.069 0.207 1.720 3.800 0.206 5.933 0.241 0.170 1.959 0.276 2.646

Others 2.558 3.652 3.438 3.640 13.288 2.944 3.836 3.372 3.534 13.686 2.801 3.727 4.008 4.318 14.854

Net Income Before Gain/Loss(-) on FXR Fluctuations,

Income Tax Expense and Capital Reserves -11.079 -9.264 -12.448 -12.168 -44.959 -8.022 0.196 -11.559 -8.953 -28.338 -4.573 -3.049 -6.743 -5.879 -20.244

Gain/Loss(-) on Foreign Exchange Rate Fluctuations 1

-8.686 -9.567 -17.311 -14.812 -50.376 -6.256 -0.290 8.758 3.386 5.598 8.978 -0.741 0.852 -0.153 8.936

Income Tax Expense 0.000 0.000 0.000 0.045 0.045 0.000 1.718 0.486 0.108 2.312 0.000 0.000 0.000 0.000 0.000

Capital Reserves 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Net Income Available for Distribution -19.765 -18.831 -29.759 -27.025 -95.380 -14.278 -1.812 -3.287 -5.675 -25.052 4.405 -3.790 -5.891 -6.032 -11.308

u/p Unaudited/Preliminary. Starting with end-December 2005, BSP financial statements have been prepared in compliance with some of the requirements of the Philippine Financial Reporting Standards (PFRS) and Philippine Accounting Standards (PAS),

both of which have been aligned with the International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS).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.r Revised due to the restatement of prior period adjustments per PAS No. 8.


2012 2013 2014

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