Manila Enters Strict Lockdown As Gov't Scrambles To Contain Covid Infections

Spot USD/PHP has pared its opening losses and last trades at PHP48.495, little changed on the day. Bears look for a sell-off past Mar 12 low/50-DMA at PHP48.370/48.349, which would draw attention to Feb 17 low of PHP48.281. Bulls keep an eye on the 200-DMA at PHP48.663, a key near-term resistance. A clean break here would open up Feb 23 high of PHP48.755.

• Pres Duterte's spokesman announced that Metro Manila and adjacent provinces would be placed under a strict week-long lockdown from today as the spread of new Covid-19 infections continued to gain pace. He said the stay-home order should have a limited economic impact owing to the upcoming Easter holidays.
• Rizal Commercial Banking Corp. wrote that the lockdown is expected to shave less than 1% off national GDP and may be partially offset by the new tax law adopted on Friday.
• The aforementioned legislation lowers corporate income tax to 25% from 30% for most companies and to 20% for smaller firms.
• Separately, Pres Duterte has asked lawmakers to raise the cap on pork imports subject to lower tariffs as the Philippines is trying to tackle supply-side drivers of inflation, which has broken out of the target range.
• In a recent interview, BSP Dep Gov Tangonan said that promoting the use of electronic money is his "life purpose" and his ambition is to make street stall accept payments via mobile phones.
• Meanwhile, Friday saw BSP Gov Diokno signal that the peso is not threatened by the increase in U.S. Tsy yields, thanks to a steady supply of FX from foreign investors and remittances.
• Philippine Bureau of the Tsy will release Feb budget balance today. On Wednesday, BSP will publish Feb bank lending & money supply data.