Federation of Batangas Rural Bankers

19/09/2025

BSP caps bank cash withdrawals at P500,000 to curb laundering
By: Ian Nicolas P. Cigaral - Reporter /
Philippine Daily Inquirer / 09:24 AM September 19, 2025

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) ordered banks to limit over-the-counter cash withdrawals to P500,000 a day. This is part of efforts to reduce money laundering risks tied to large-value transactions.

This developed as the BSP investigated bank accounts linked to individuals accused of anomalies in government flood control projects. The central bank is testing a brand new law in the high profile corruption scandal. These activities may have involved money muling or the use of financial accounts to move or disguise criminal proceeds.

READ: Bangko Sentral orders stricter client due diligence

Under Circular No. 1218 dated Sept. 18 withdrawals above the threshold, or its equivalent to foreign currency, must be carried out through checks, fund transfers, direct credit to accounts\ or other digital channels that create an audit trail.

Banks may set stricter thresholds based on their own risk assessments and client profiles, the central bank said.

Any cash transactions exceeding the ceiling will trigger enhanced due diligence checks. That would only be the time when banks can allow large-value payouts, provided that the customer can submit additional identification information and proof of a legitimate business purpose or transaction.

Former Finance Secretary Cesar Purisima earlier called on local policymakers to adopt tougher curbs on cash transactions. He warned that the country’s reliance on envelopes and bags of banknotes has made it easier for corruption to thrive. /rwd

FBRB | Federation of Batangas Rural Bankers

03/06/2025

Bank lending growth slows in April
By Keisha Ta-Asan(The Philippine Star) -
June 3, 2025 - 12:00am

MANILA, Philippines — Credit growth eased in April, rising by only 11.2 percent from an 11.8-percent growth in March, as banks slowed their lending to key production sectors, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Outstanding loans of universal and commercial banks, net of reverse repurchase (RRP) placements with the BSP, went up by 11.2 percent to P13.25 trillion in April. On a seasonally adjusted month-on-month basis, bank lending increased by 0.3 percent.

Lending growth in April marked the slowest pace since November last year lending expanded by 11.1 percent.

“Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability mandates,” the central bank said.

Credit extended to residents, net of RRPs, grew at a slower pace of 11.9 percent in April, down from 12.4 percent the previous month. Meanwhile, loans to non-residents declined further by 10 percent, deeper than the 5.6-percent contraction seen in March.

Lending for production activities, which made up the bulk of bank credit, rose by 10.3 percent. This is slightly lower than the 10.8 percent in March.

Growth slowed in several key sectors including real estate (8.9 percent), wholesale and retail trade (9.9 percent), manufacturing (0.6 percent), financial and insurance activities (7.5 percent), information and communication (7.7 percent) as well as transportation and storage (14.9 percent).

In contrast, consumer loans to residents grew by 24 percent in April, slightly faster than March’s 23.9 percent, fueled mainly by robust credit card borrowing.

Credit card receivables surged by 29.3 percent to P985.3 billion in April from P762.19 billion in the same month in 2024. This was a tad faster than the 29 percent growth a month ago.

Auto loans rose by 19 percent to P483.82 billion from P406.6 billion, while salary-based general-purpose consumption loans inched up by 9.3 percent to P160.38 billion.

Bank lending is a key driver of economic activity as it reflects the confidence of consumers and businesses to borrow and invest. Slower credit growth may signal more cautious sentiment or tighter financial conditions.

FBRB | Federation of Batangas Rural Bankers

03/06/2025

SEC cancels licenses of more lending, financing companies
By Richmond Mercurio(The Philippine Star)
June 3, 2025 - 12:00am

MANILA, Philippines — The Securities and Exchange Commission (SEC) has canceled the corporate registrations and secondary licenses of more companies as the firm continues its crackdown against erring lending and financing firms.

On top of revoking the licenses of 47 corporations initially declared delinquent as previously reported by The STAR, the SEC said it has also issued separate orders for the revocation of the corporate registration of nine more companies for continuing noncompliance with their reportorial requirements.

The nine companies are Air Fish Lending Corp., Cash Mart Asia Lending Inc., Cashbee Lending Services Inc., Kayamo Atlas Lending Corp., Lucky Shell Fintech Lending Corp., Qcash Finance Corp., Whale Tail Lending Services Inc., The Golden Legacy Financing Corp. and Just Smile Lending Corp.

Of the companies, the commission said two failed to comply with SEC Memorandum Circular 28, Series of 2020, requiring the submission of official e-mail account addresses and cellphone numbers for transactions with the commission.

The remaining seven, meanwhile, failed to submit their business plans as required under SEC Memorandum Circular 3, Series of 2022, or the Implementation of Bangko Sentral ng Pilipinas Circular 1133, Series of 2021, on the ceiling/s on interest rates and other fees charged by lending companies, financing companies and their online lending platforms.

The SEC Financing and Lending Companies Department (FinLenD) said the companies failed to observe the directives of the commission despite the issuance of show cause letters and notice of deficiencies informing and directing them to comply and show proof of compliance with their reportorial requirements.

Last week, The STAR reported that the SEC revoked the licenses of nearly four dozen delinquent financing corporations

FinLenD canceled the primary registrations and certificates of authority to operating as a lending or financing company of 47 companies which have been declared delinquent pursuant to the Revised Corporation Code (RCC).

Section 177 of the RCC provides that the SEC may place any corporation under delinquent status in case of failure to submit the reportorial requirements three times, consecutively or intermittently, within a period of five years.

The 47 corporations were found by the commission to have failed to file their audited financial statements, general information sheets, director or trustee compensation report and director or trustee appraisal or performance report three times within a period of five years.

FBRB | Federation of Batangas Rural Bankers

21/04/2025

Tariffs and tsunamis
By: Cielito F. Habito -
Philippine Daily Inquirer / 04:30 AM April 15, 2025

I know it helps to look for silver linings rather than dwell on dark clouds in unsettling times like now, when United States President Donald Trump’s erratic moves threaten to throw the whole world in great disarray. There has indeed been much self-consoling about how Trump’s tariffs could help us gain an advantage over our neighbors, given that the 17 percent he imposed on our exports to them is the second-lowest in Asean. Some take comfort in our far smaller dependence on exports (which is otherwise a glaring handicap), with an export-to-GDP ratio in 2023 of only 12.7 percent, while our neighbors average 60 percent. The US, our single largest export market, accounted for 16.6 percent of our total goods exports last year. So even under the far-fetched scenario of complete loss of our US exports, our GDP stands to lose only two percent (that is, 16.6 percent of 12.7 percent). Meanwhile, optimists expect US purchases of goods from China, Vietnam, and other neighbors that Trump slapped with much higher tariffs to shift our way instead, and that some factories now in China and even Vietnam would move here as well.

Our biggest mistake would be to allow these silver linings to lull us into complacency and fail to see and prepare enough for the dangers that lie ahead. I and many others have already pointed out that even as the direct hit of Trump’s tariffs will be much lighter on us than on say, Vietnam with the 46 percent tariff slapped on them, it’s the indirect hit from a likely global economic downturn that’s the bigger threat. And whether the favorable trade and investment diversions described above, would even happen, is a big question mark, for three reasons.

First, Trump turned out to be tentative about the sweeping tariffs he announced on April 2. His recent backtracking while gloating that dozens of world leaders are now rushing to appease him suggests that his April 2 “Liberation Day” tariffs may have been mere bravado meant to jolt the world into submission—hence may yet drastically change. Exemptions and steep reductions from earlier announced rates have in fact already been announced, especially for critical inputs to US industries, and favored consumer products like laptop computers and smartphones.

Second, our attractiveness to firms moving out of China and Vietnam to avoid the steep US tariffs remains negated by age-old deterrents that have long led foreign direct investments to elude us, the topmost of which are bad governance and politics. I cannot believe that we can overcome these deeply rooted flaws overnight.

Third, Asean has announced plans to negotiate collectively on Trump’s threatened tariffs as a bloc. It does make sense to take strength in numbers rather than have each of us engage the US individually in lopsided David vs Goliath negotiations. But this cancels the advantage we otherwise enjoy with our lower 17-percent tariff vis-à-vis our neighbors.

Still, there’s an even greater danger that’s imminent even if Trump chooses to drop his “reciprocal tariffs” on all else other than China, which some believe is his sole target anyway. This is the very real prospect that China, shut off from the US market with prohibitive tariffs, will flood Southeast Asian markets with their manufactured products that have nowhere else to go—and in the process kill domestic manufacturers along with hundreds of thousands, possibly millions of jobs elsewhere in the region. Even prior to Trump’s tariffs, manufacturers in Thailand, Indonesia, Malaysia, and here had already been reeling from a massive onslaught of cheap Chinese goods. These span everyday household and personal items to electronic gadgets and appliances, motor vehicles, light and heavy equipment, and construction materials like steel and cement.

Large manufacturing firms in the region have recently decided to fold up, like Sritex in Indonesia; Jinko Solar in Malaysia; and Subaru, Suzuki, and more in Thailand—all blaming cheap competition from China and steep US tariffs for their woes. Data show that not even the pandemic stopped Chinese imports from doubling in Thailand, Malaysia, and Vietnam since 2018 and jumping one-and-a-half times in Indonesia and the Philippines. China’s share in our total imports expanded from 18.5 percent in 2016 to 25.8 percent in 2024, and further to 28.9 percent in January 2025. And the worst is yet to come. Indonesian economist and former trade minister Mari Pangestu warns that “we are about to be hit with a tsunami of Chinese goods” as Trump slaps China with extreme tariffs. Are we even anticipating and preparing for this after already seeing recent surges harm our own manufacturers? Our neighbors have announced anti-dumping duties on China imports. We can’t afford not to follow their lead, but we must also hunker down to do even more homework than we’ve managed to do before.

FBRB | Federation of Batangas Rural Bankers

18/03/2025

T-bill rates decline on bets of April BSP cut
March 18, 2025 | 12:02 am JUDGE FLORO

THE GOVERNMENT upsized the volume of Treasury bills (T-bills) it awarded on Monday as yields dropped across the board on expectations that the Bangko Sentral ng Pilipinas (BSP) will resume its rate-cut cycle as early as next month.

The Bureau of the Treasury (BTr) raised P30.8 billion from the T-bills it auctioned off on Monday, higher than the initial P22-billion plan, as total bids reached P118.944 billion, more than five times as much as the amount on offer and higher than the P90.598 billion in tenders recorded on March 10.

The strong demand prompted the government to double the accepted noncompetitive bids for the 91- and 182-day securities to P5.6 billion and to P6.4 billion for the 364-day T-bill, the Treasury said in a statement after the auction.

Broken down, the Treasury borrowed P9.8 billion via the 91-day T-bills, higher than the P7-billion plan, as tenders for the tenor reached P35.384 billion. The three-month paper was quoted at an average rate of 5.118%, declining by six basis points (bps) from the 5.178% seen at the previous auction. Tenders accepted by the BTr carried yields of 5.1% to 5.123%.

The government also made a P9.8-billion award of the 182-day securities, above the programmed P7 billion, as bids stood at P31.05 billion. The average rate of the six-month T-bill was at 5.496%, 5.2 bps lower than the 5.548% fetched last week, with accepted rates ranging from 5.45% to 5.513%.

Lastly, the Treasury raised P11.2 billion via the 364-day debt papers, more than the P8 billion placed on the auction block, as demand for the tenor totaled P52.06 billion. The average rate of the one-year debt decreased by 7.6 bps to 5.697% from 5.773% previously, with bids accepted having yields of 5.693% to 5.713%.

At the secondary market before the auction, the 91-, 182-, and 364-day T-bills were quoted at 5.2499%, 5.5675%, and 5.7920%, respectively, based on PHP Bloomberg Valuation Service (BVAL) Reference Rates data provided by the Treasury.

The government hiked its T-bill award as average rates were all lower than yields seen at the previous auction and at the secondary market, the Treasury said.

T-bill rates went down as investors flocked the offer to lock in relatively high yields before the BSP resumes its easing cycle, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Market players are buying government securities in anticipation of an April rate cut from the central bank and with lower reserve requirement ratios (RRR) by month-end, which could flood the financial system with fresh liquidity that could cause debt yields to decline further, a trader said in a text message.

BSP Governor Eli M. Remolona, Jr. last week said a rate cut is “on the table” at the Monetary Board’s policy meeting on April 10.

He said the BSP is still on easing mode and expects to slash benchmark borrowing costs by “a few more times” this year.

The Monetary Board in February unexpectedly paused its rate-cut cycle, which Mr. Remolona said was a “prudent” move amid uncertainty over the trade policies of US President Donald J. Trump and their potential impact on the Philippines.

The BSP chief earlier said that the central bank will likely continue reducing interest rates by 25 bps at a time, with 50 bps in cuts still on the table this year.

Last year, the BSP cut benchmark interest rates by a total of 75 bps via three consecutive 25-bp reductions since it began its easing cycle in August, bringing the policy rate to 5.75%.

Meanwhile, the RRR of universal and commercial banks and nonbank financial institutions with quasi-banking functions will be reduced by 200 bps to 5% from 7% effective March 28.

The ratio for digital banks will also be trimmed by 150 bps to 2.5%, while that for thrift banks will be cut by 100 bps to 0%.

Rural and cooperative banks’ RRR has been at zero since October last year.

The RRR is the portion of reserves that banks must hold onto to ensure they can meet liabilities in case of sudden withdrawals. A lower ratio means banks have more liquidity, which they can use to fund their loans.

On Tuesday, the BTr will offer P30 billion in reissued 10-year Treasury bonds (T-bonds) with a remaining life of eight years and 10 months.

The Treasury is looking to raise P147 billion from the domestic market this month, or P22 billion via T-bills and P125 billion through T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.54 trillion or 5.3% of gross domestic product this year. — Aaron Michael C. Sy

FBRB | Federation of Batangas Rural Bankers

01/03/2025

PDIC raises maximum deposit insurance to P1 million
FEB 28, 2025 10:58 AM PHT
TATIANA MALIGRO

MANILA, Philippines – The Philippine Deposit Insurance Corporation (PDIC) is doubling the maximum deposit insurance coverage (MDIC) to P1 million from the current P500,000.

The PDIC said in a memorandum to all banks dated Thursday, February 27, that the increase will take effect on March 15.

According to the state deposit insurer, the new MDIC will fully insure 136 million in deposit accounts, or 98.6% of the total deposit accounts numbering 138 million. This is just 1-percentage point higher than the 97.6% of fully insured deposit accounts when the MDIC was pegged at P500,000.

FBRB | Federation of Batangas Rural Bankers

12/02/2025

Anti-Fraud
FIRST PERSON - Alex Magno - The Philippine Star
February 11, 2025 | 12:00am

AIt is easy for the layman to miss the actual significance of this latest piece of legislation. In fact, it is a major blow against the scourge of financial scams taking advantage of our tough bank secrecy laws and lumbering data privacy regulations.

The Anti-Financial Account Scamming Act (AFASA) drastically reduces the ability of organized criminal entities to exploit the legal protections available here. The new law empowers our financial institutions and monetary authorities to investigate suspicious accounts throughly and decisively. When a financial transaction is flagged as disputed, the veil of secrecy is effectively lifted.

Under the AFASA, the BSP is authorized to investigate and inquire into financial accounts linked to suspicious activities. In doing so, it is not constrained by the Bank Secrecy Law (RA 1405) or the Data Privacy Act (RA 10173).

For context, the two laws mentioned above caused the Financial Action Task Force (FATF) to keep the Philippines in the gray list. The FATF is a global consortium aimed at fighting money laundering, especially involving terrorist groups and organized criminal syndicates.

With less than sterling credentials for combatting money laundering, the Philippines faced sanctions from the international financial community. Despite international pressure, however, our legislators resisted reforms to our bank secrecy laws. Domestic opinion and powerful business interests did not favor reforming our bank secrecy laws.

For a while, what the FATF wanted to see and what was politically practicable for our legislators did seem irreconcilable. This is why, for a long period, the Philippines was kept on the gray list.

Through this period, however, we have been busy building up the skills of our banks and financial institutions in fighting money laundering. Strict KYC (know your customer) rules have been put in place. Banks are entitled to inquire about the sources and uses of funds before an account is accepted.

We have gone a long way since that time when anyone could walk into a bank branch, show some minimum amount of money and instantly open and account. There were even numbered accounts and accounts using aliases. Those things are no longer possible in the present regulatory environment.

Our bank officers regularly undergo training to keep abreast with new technologies for fighting money laundering. With stricter bank regulations, the operating space for criminal syndicates and financial scammers has been reduced dramatically.

Notice that when POGO operations were raided over the past few months, most of them were found to have their own vaults for keeping large amounts of cash. International money laundering networks used other means to store and exchange value. This is why there was a sudden proliferation of supercars found in the country. The luxury vehicles, because they retained value, were used as some sort of currency in the criminal effort to evade using the formal banking system.

The new regulatory framework under AFASA makes things more difficult for money laundering and financial scamming operations. Banking institutions may now temporarily hold funds, conduct coordinated verifications and investigate flagged accounts.

AFASA recognizes that privacy concerns, while important, cannot outweigh the need to secure the public from financial crimes. The objective is to eventually ensure that fraudsters can no longer operate with impunity, hiding behind bank secrecy.

With its highly targeted approach, the new law ensures that the privacy of law-abiding citizens remains protected. Only those accounts that show no clear economic purpose or are linked to possibly illegal sources are flagged for investigation.

Our bank officers are now trained in fraud management systems (FMS) that deploy the powers of advanced digital technologies to detect possibly anomalous transactions. Stronger coordination between the BSP and law-enforcement agencies such as the NBI and the PNP provides us with a more robust framework for securing the financial system.

This reform in our regulatory framework is timely. We are in the midst of a rapid revolution driven by emerging financial technologies that allows transactions to be completed in real time. More and more payments are now made over the smartphone. Strictly digital banks are proliferating. Ordinary citizens need a regulatory environment that is able to keep up with the dramatic technological changes happening before our eyes.

More and more, our financial system will depend on artificial intelligence to more quickly process transactions and keep down operational costs. We can look forward to a basically frictionless financial system, with less paper and more reliant on digital trails. We need a modern regulatory framework to cope with this financial revolution.

We can no longer think about the matter as a struggle between privacy and regulation. Technology has transcended that. If we do not have a modern regulatory system, our financial system will be vulnerable to fraud and ordinary citizens will be exposed to every sort of scam imaginable.

No economy will flourish if its financial system is unsafe for law-abiding citizens. We have seen from numerous examples how international money-laundering syndicates are able to find the talent to outrun existing security systems. They are able to spot the smallest loopholes in the financial security edifice. If our regulations do not modernize quickly enough, we lose to the criminals.

Therefore, upgraded regulations such as the AFASA are more than just enhancing enforcement capacity. They are necessary to enable our financial system to facilitate the evolution of a modern, IT-driven economy.

FBRB | Federation of Batangas Rural Bankers

06/02/2025

Contrived
FIRST PERSON - Alex Magno - The Philippine Star
February 6, 2025 | 12:00am

After many days of warning us this was coming, the Department of Agriculture declared a “food security emergency on rice” last Monday.

We are told this will be in effect for only a short period. It will very likely be ineffectual.

The emergency will not solve our chronic inefficiency in rice production. It will not bring about a Green Revolution. It will not deliver the P20 per kilo rice PBBM promised during his campaign. It will not even break up the trading syndicates said to have made billions by pocketing the proceeds from the reduction in rice tariff rates rather than passing on the benefit to consumers.

At the moment, we face no rice shortage – thanks to the liberalization of rice trading. The spike in rice prices happened this time last year. Today, with a global bumper crop, rice prices are in fact softening.

An “emergency” such as was declared this week may be justified only under two conditions: when there is a shortage of the staple and when prices are spiking uncontrollably. Neither applies today.

This is a contrived “emergency.” It is intended to accomplish only one thing: to provide a cover for the NFA to sell rice stocks at artificial prices to LGUs and the Kadiwa operation.

Without this cover, the NFA is required to dispose of its excess stocks through a public auction. This rule is an anti-corruption measure.

With the “emergency,” the NFA may now sell its stocks at a politically determined price. This throws every market discipline out of the window. Government determines prices as in a centrally-planned economy.

The NFA will now sell about 150,000 tons from its reserves at an artificially low price. This will result in a massive loss for government – and, eventually, for all taxpayers.

This loss-producing negotiated sale is actually a cross-subsidy. The actual loss becomes calculable when the time comes for the NFA to replenish its buffer stock. Since our government already operates on a deficit, the financial loss will convert into additional borrowing. Therefore, it will be charged to our children.

Why commit this fiscal irresponsibility? For the circus of it all.

The administration is facing rapidly eroding job approval ratings in large part due to high food prices. It is desperately trying to stop the bleeding by creating artificial rice prices, possible only through a complex web of subsidies.

This whole operation intends to create the semblance of cheap rice – without the slightest improvement in our agricultural productivity. Our consumers are expected to play along by pretending to believe in magic.

Unfortunately for the masters of this circus, 150,000 metric tons of rice will not last for very long. The artificial prices cannot hold. Economic reality – especially the cruel neglect of our agriculture – will bite again in a few weeks. The meager political gains to be made here will vanish like the chimera it truly is.

Then we are left with the same mess – with wasted subsidies added.

18/12/2024

Why interest rates are of interest
By: Cielito F. Habito -
Philippine Daily Inquirer / 04:30 AM December 17, 2024

I’ve long asserted that to the ordinary Filipino, only three things about our economy are of interest: presyo or prices, measured by the inflation rate; trabaho or jobs, measured by the employment or unemployment rate; and kita or income, measured by the gross domestic product or GDP—spelling P-T-K or PiTiK. Surveys constantly affirm this. So in economic briefings that I’m frequently asked to give to various groups, I use my trademark “PiTiK test” to assess our economic performance. But there’s a fourth item my business audiences also ask about: interest rates. Why is it important, and how does it affect us? How is it determined in our economy? What internal and external factors influence it?

For those of us who save, interest rates measure how much earnings we get for the money we put in a bank deposit or other interest-earning investment assets, like government bonds, treasury bills, or corporate bonds. For those who are in debt, interest rates tell us how much more we must pay back when we borrow funds from a bank. The rates for the former are lower than for the latter, and that margin determines how much money the banks can make.

A country’s central bank, the Bangko Sentral ng Pilipinas (BSP) in our case, sets “policy rates” that in turn influence the rates applied by the banks. These rates are the interest rates at which commercial banks can borrow funds from (or “deposit” funds into) the BSP by selling (or buying from) them government bonds, and agreeing to repurchase (or resell) them the following day. These are known as the overnight repurchase or “repo” (or overnight reverse repo) rates (I explained this 10 years ago in “Repos 101: BSP’s balancing act,” 8/5/14). The higher the repo interest rate, the less attractive it is for banks to borrow money from BSP via this mechanism, and the less money that gets pumped into the economy. Higher interest rates slow down economic activity, which means a slowdown in jobs and income growth.

How exactly does such a slowdown happen? Higher interest rates dampen consumer spending as loans for housing, cars, and credit card purchases get more expensive. The housing market in the Philippines is notably sensitive to interest rates, as many Filipinos finance their homes with loans. Higher interest rates raise their mortgage payments, which reduce demand for housing, in turn slowing down construction. A slowdown in housing can ripple on to a variety of related industries beyond construction, including home furnishings and other consumer goods. But it is argued that this effect may not be as strong in our economy where many households rely on overseas workers’ remittances, which are less affected by interest rate movements.

The stronger effect is likely to be on the supply side, or in businesses themselves, for whom the cost of loans for expansion, equipment, or working capital rises with interest rates. Especially sensitive are key sectors like construction, manufacturing, and retail, which often rely on credit to fund expansion and operational needs, but various other industries also rely heavily on loans. Higher interest rates could also draw in foreign capital as overseas investors seek better returns on financial investments such as bonds or deposits in local banks. But these investments do not directly create jobs, and tend to be footloose (that’s why they’re also called “hot money”), although they also help strengthen the peso (keep the peso-dollar exchange rate down). But higher borrowing costs can still overshadow ultimate effects.

What makes the BSP raise or lower interest rates? Its primary mandate, defined by law, is to manage and minimize inflation—that is, keep prices stable—by managing the supply of money in circulation, with its policy interest rates as a tool (among several others). Even so, it must worry about jobs and incomes as well, and knows that having interest rates too high can slow or even choke the economy. But having them too low can lead to “overheating” and stoke inflation, so it finds itself in a perennial balancing act.

As it treads this tightrope, it must also watch external forces that could impinge on the value of the peso, including interest rate movements overseas, especially in the United States as managed by the Federal Reserve (Fed). We, along with many other economies strongly tied to the US economy, cannot have our interest rates deviate too far from US rates, as being much lower will drive dollars out of our economy and lower the value of our currency. That’s why moves by the US Fed are watched the world over. And that is why any new moves by returning President Donald Trump will be watched closely, because when the US economy sneezes, it is said that other economies like ours could catch a cold. And given Trump’s propensity for seemingly irrational moves, the US may be in for more than a sneeze.

FBRB | Federation of Batangas Rural Bankers