The People’s Republic of China’s (PRC) gross domestic product (GDP) grew 6.7% year-on-year (y-o-y) in the third quarter (Q3) of 2016, the same rate as in the prior quarter. In the first 9 months of the year, GDP grew 6.7% y-o-y. By sector, agriculture grew 3.5% y-o-y, manufacturing expanded 6.1% y-o-y, and services gained 7.6% y-o-y. On a quarter-on-quarter (q-o-q) basis, GDP grew 1.8% in Q3 2016. Industrial production in the PRC grew 6.1% y-o-y in September, up from 6.3% y-o-y in August. The slower y-o-y growth in September was due to a slight decrease in the growth rate for manufacturing, which fell to 6.5% y-o-y from 6.8% y-o-y in August.
In its Board of Governors meeting held on 19–20 October, Bank Indonesia decided to lower its 7-day reverse repo rate by 25 basis points (bps) to 4.75%. The central bank has lowered the 7-day reverse repo rate by a cumulative 50 bps since it switched to using this rate as its policy rate in August. The deposit facility rate and lending facility rate were reduced by 25 bps each to 4.00% and 5.50%, respectively.
Consumer price inflation in Hong Kong, China eased to 2.7% y-o-y in September from 4.3% y-o-y in August. The decline in inflation was due largely to a low base effect resulting from the government’s one-off relief measure for public housing tenants in August 2015. In Malaysia, consumer price inflation remained unchanged in September from the previous month at 1.5% y-o-y. The prices of food and nonalcoholic beverages, which account for almost a third of the Consumer Price Index, posted a smaller annual increase of 3.0% y-o-y in September compared with 3.5% y-o-y in August.
The Producer Price Index in the Republic of Korea fell 1.1% y-o-y but rose 0.2% month-on-month in September, according to the latest report of the Bank of Korea released last week. The decline was spurred by y-o-y decreases in product prices in the manufacturing and utility sectors.
Overseas Filipino workers’ personal remittances to the Philippines rebounded in August, surging 16.0% y-o-y following a 5.4% y-o-y contraction in July, per the latest remittance data from the Bangko Sentral ng Pilipinas released last week. Between July and August, personal remittances increased from USD2.4 billion to USD2.6 billion, with the cumulative total for January–August reaching USD19.5 billion.
BDO Unibank in the Philippines priced USD300 million worth of 5-year fixed-rate senior notes on a 2.63% coupon last week, the lowest rate on record for a USD-denominated bond from a Philippine issuer. The issuance is part of the bank’s Medium-Term Note Program. Asian investors bought 87% of the total, while the remaining 13% went to European investors. The bonds were rated Baa2 by Moody’s Investors Service.
For the past week, local currency government bond yields rose for all tenors in the Republic of Korea and and for most tenors in Indonesia and the Philippines. On the other hand, bonds yields were mostly down in the People’s Republic of China; Malaysia, Thailand and Viet Nam. Bond yields were mixed in Singapore, and were partly unchanged and partly down in Hong Kong, China. The 2-year versus 10-year yield spread narrowed for all emerging East Asian markets except Indonesia and the Republic of Korea.