Trump Endorses Japan’s Sanae Takaichi Ahead of Crucial Election Amid Market and China Tensions 
China Extends Gold Buying Streak as Reserves Surge Despite Volatile Prices 
Vietnam’s Trade Surplus With US Jumps as Exports Surge and China Imports Hit Record 
Thailand Inflation Remains Negative for 10th Straight Month in January 
RBI Holds Repo Rate at 5.25% as India’s Growth Outlook Strengthens After U.S. Trade Deal 
South Korea Assures U.S. on Trade Deal Commitments Amid Tariff Concerns 
U.S.-India Trade Framework Signals Major Shift in Tariffs, Energy, and Supply Chains 
Silver Prices Plunge in Asian Trade as Dollar Strength Triggers Fresh Precious Metals Sell-Off 
South Korea’s Weak Won Struggles as Retail Investors Pour Money Into U.S. Stocks 
Trump Lifts 25% Tariff on Indian Goods in Strategic U.S.–India Trade and Energy Deal 
The Philippines peso has underperformed in comparison to its peers in the recent months. Part of this reflects increasing political concerns among foreign investors. There was also a spike in the 5Y credit default swap (CDS) spread to 117 basis points, from 84 bps in early September.
As the distortion from low oil prices dissipates going into 2017, CPI inflation should average 2.6 percent next year, up from a projected 1.6 percent this year. Coupled with the anticipated upward pressure from global rates, the higher inflation trajectory is likely to prompt the BSP to tighten its policy stance.
Meanwhile, major central banks around the world are recognizing the limits of monetary policy. With taper a consideration for the European Central Bank (ECB) and the Bank of Japan (BOJ) over the coming quarters, longer-term developed market yields are already heading higher.
Against this backdrop, the market is likely to be more discerning on fundamentals. Inflation and rate hike risks are not adequately priced into the market. Couched in an environment of rising developed market interest rates, there is considerable room for higher PHgov yields.
