Optimism is in the air.
Yes, Virginia, positivity and enthusiasm radiated at Tuesday's HSBC-sponsored forum, where speakers unanimously declared the country "Asia's Rising Star," a stark departure from its "Tiger economy" label of the 1990s."
Sandeep Uppal, president and chief executive officer of HSBC Philippines, vowed the bank would continue lending, extending its support to help drive the country in becoming the rising star, if not the superstar, of the region. “As a global bank with deep local expertise, we’ve always been committed to acting as a bridge to unlock opportunities for development.”
Bringing its clients and government stakeholders together to explore opportunities across the global economic spectrum has been the mantra of HSBC, the oldest foreign bank operating in the country. Its first branch opened in Binondo on Nov. 29, 1875, with its business concentrated on financing the sugar trade and other key exports.
The Philippines is on the verge of taking off, according to the unanimous observation of all the keynote speakers – Clinton Andrew Campos Hess, chairman and CEO of Unilab Group, Inc.; Fredy Ong, chairman and CEO of Unilever; Meean Dy, president and CEO of Ayala Land Inc.; and Frederick Go, business reporter-turned-real estate steward and now the government’s economic czar.
I fully agree that the economic momentum is there. The opportunity is immense, and now is the best time to unlock and harness the country’s potential and maximize its economic prospects.
I’m no pessimist, just pragmatic. Recalling the roaring Tiger that the country was in the 1990s, history tells me there will be humps and potholes that will influence this aspiration.
One such curve ball that could influence the takeoff is geopolitical conditions, including the result of the US election. There could be twists and turns in geopolitical situations.
While the market as early as last month was preparing for a specific candidate's victory, the initial impact was felt Wednesday, shown by the 10 to 15 basis points across-the-board uptick in the yield curve of US treasuries. Likewise, Philippine bonds moved, though slightly, between five to seven basis points, only to be bought back by the market.
Yes, uncertainty is in the air. This sentiment pervades with changes in a country's leadership. Amidst all this, the Central Bank remains the bedrock of continuity and stability.
The expectation is for the US Federal Reserve to stay the course, but the pace of interest rate reduction may not be as deep as expected. Today, Nov. 7, the US Fed is scheduled to make another move. There’s a high probability of a reduction but will be limited to 25 basis points and another 25 basis points in December.
Now, will this trickle down to our local market? Will Bangko Sentral ng Pilipinas (BSP) adopt the same reduction against the backdrop of the domestic economy slowing down to 5.2 percent in the third quarter, against a forecast of 5.7 percent, from 6.4 percent posted in the second quarter?
BSP has a week to assess the horizon with gross domestic product slowing down and inflation not going away easily and still on a roller coaster trend. The bet is on.
Talk back to me at [email protected]