Philippines outlook worsens, Taiwan in the dock

We are lowering our 2021 GDP growth forecast for the Philippines due to the worsening virus situation and the recent deterioration in the economic data. A rapid increase in foreign currency intervention in Taiwan – FX reserves have increased by 15% over the past 12 months – means it now meets all three criteria laid down by the US Treasury to be labelled a currency manipulator. A decision will be made when the US Treasury issues its next semi-annual report, which could be as early as next month. Given the importance of exports to its economy, it seems unlikely Taiwan would agree to a major change in its exchange rate policy.