Philippine Markets Newsletter

MONDAY MACRO: At new highs, this economic indicator is pointing towards more bullish growth this year

February 13, 2022

The government is intent on supporting greater economic growth this year, with the BOI looking to approve about PHP1 trillion in investments, along with other growth-inducing economic reforms and projects.

Looking at this indicator, which is currently at new highs, it seems that businesses are becoming more bullish as well.

Philippine Markets Newsletter: 
The Monday Macro Report
Powered by Valens Research

The Board of Investments just announced that it is looking to approve PHP1 trillion in investments in 2022, that is, on top of other economic reforms and initiatives currently in place.

An example of these initiatives is the participation in the Regional Comprehensive Economic Partnership (RCEP).

The RCEP aims to liberalize international trade, enhance competition policies and intellectual property rights, increase investment flows, and reap other economic benefits.

The participation of the Philippines in RCEP is expected to expand GDP beyond 6% levels, grow foreign direct investments, and increase exports. 

Similarly, the “Build, Build, Build” infrastructure program aims to boost the economy through increased consumption and investments, as well as increased employment opportunities.

These initiatives, along with many others, will likely support greater economic growth for the country this year. 

It seems that businesses have become bullish on growth prospects as well, as exhibited by the latest data on Commercial and Industrial (C&I) loans. 

For context, C&I loans are loans made to businesses for additional working capital purposes, funding of capital expenditures, or for funding of daily business operations.

Philippine C&I loans have historically been stable throughout the late ‘90s up until the financial crisis in 2008. Lending has since grown consistently since then due to the government enacting growth-inducing policies and initiatives to recover from the crisis.

However, the pandemic did stunt the growth of C&I loans.

In May and April 2020, C&I loans grew 11% from 8%-9% levels in the months prior as businesses began shoring up liquidity in order to survive during the lockdown. Since then, C&I loan growth has fallen to just 1% in November 2020 and even entered negative territory the following months all through June 2021.

There are many factors to account for this drop in late 2020. Many businesses halted operations due to massive declines in demand and sales, and the re-imposition of lockdowns didn’t help either. A lot of these businesses, especially the smaller ones, were unable to survive and had to shut down operations to cut losses.

Overall, C&I loan growth weakened because businesses were pessimistic about the current economic environment, and piling on debt amidst the uncertainties brought by the pandemic did not seem like a smart move.

Businesses were reinvigorated beginning August 2021, with C&I loans growing to new highs in December of the same year. The optimism was fueled by the easing of pandemic restrictions as well as rising vaccination rates. 

As it reaches a new peak, C&I loan growth highlights how businesses are resuming their growth plans, which will likely persist despite any short-term concerns such as the recent spike in COVID cases due to the Omicron variant or general economic concerns such as inflation. 

About the Philippine Markets Newsletter
“The Monday Macro Report”

When just about anyone can post just about anything online, it gets increasingly difficult for an individual investor to sift through the plethora of information available. 

Investors need a tool that will help them cut through any biased or misleading information and dive straight into reliable and useful data. 

Every Monday, we publish an interesting chart on the Philippine economy and stock market. We highlight data that investors would normally look at, but through the lens of Uniform Accounting, a powerful tool that gets investors closer to understanding the economic reality of firms. 

Understanding what kind of market we are in, what leading indicators we should be looking at, and what market expectations are, will make investing a less monumental task than finding a needle in a haystack.

Hope you’ve found this week’s macro chart interesting and insightful. 

Stay tuned for next week’s Monday Macro report! 


Angelica Lim 
Research Director
Philippine Markets Newsletter
Powered by Valens Research

View All

You don’t have access to the Valens Research Premium Application.

To get access to our best content including the highly regarded Conviction Long List and Market Phase Cycle macro newsletter, please contact our Client Relations Team at 630-841-0683 or email

Please fill out the fields below so that our client relations team can contact you

Or contact our Client Relationship Team at 630-841-0683