The Philippines’ gross international reserves rose to USD46 billion last week due to proceeds from the issuance of USD1 billion worth of samurai bonds as well as rising foreign investment inflows and remittances from overseas workers. The Department of Finance is anticipating a lower-than-expected budget deficit for the first quarter of 2010 due to rising income tax and customs collections. Meanwhile, consumer prices rose 4.4 percent year-on-year (y-o-y) in March, slightly up from 4.2 percent in February, mainly due to price increases for fuel, light, and water.
* Policy rates remained unchanged in Indonesia, the Republic of Korea (Korea), and Japan last week. Bank Indonesia (BI) decided to keep its benchmark interest rate steady at 6.5 percent. Korea kept its base rate at 2.0 percent. The Bank of Japan’s (BOJ) Policy Board decided to keep its uncollateralized overnight call rate at 0.1 percent.
* Last week, the People’s Bank of China (PBOC) sold CNY15 billion of 3-year bonds, while Malaysia’s CIMB Group Holdings sold MYR750 million of subordinated notes. In the Philippines, the Power Sector Assets and Liabilities Management Corp (PSALM) launched the sale of PHP20 billion worth of bonds. In Indonesia, PT Lippo Karawaci is planning to issue USD350 million worth of 5-year bonds, while Indonesian Export Financing Institutions (formerly Bank Ekspor Indonesia) is in the process of selecting underwriters for its IDR2.5 trillion bond issue.
* Vietnam’s gross domestic product (GDP) in the first quarter of 2010 rose 5.83 percent year-on-year (y-o-y), driven by the construction, tourism, and banking services sectors. Malaysia’s industrial production index (IPI) rose 4.9 percent y-o-y in February, lower than the revised 13.7 percent growth posted in January. Singapore’s Purchasing Managers’ Index (PMI) for March eased to 51.1 from February’s 51.9.
* The People’s Republic of China (PRC) posted its first monthly trade deficit in six years in March on the back of a 66 percent y-o-y surge in imports during the month.
* In Malaysia, state-owned financial guarantee institution Danajanim Nasional Bhd. (Danajanim) is planning to guarantee MYR3 billion worth of bonds this year. Since its inception in May 2009, Danajanim has already approved MYR1.4 million in bond guarantees.
* Government bond yields fell for all maturities in Indonesia as well as for most maturities in Korea, Malaysia, Singapore, and Thailand, while yields rose in most other emerging East Asian markets. Yield spreads between 2- and 10-year maturities widened in the PRC; Hong Kong, China; Indonesia; Malaysia; and the Philippines, while they narrowed in most other emerging East Asian markets.
* Finally, the more interesting economic data release points this week include consumer price inflation and industrial production for the PRC; GDP growth for the PRC and Singapore; money supply growth for the PRC and Indonesia; and the unemployment rate for Korea.