Remittance growth slows to 2.7% in Jan–BSP
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ROW T H of rem it t a nces from Filipinos abroad slowed to 2.7 percent in January 2024, according to the latest data from the Bangko Sentral ng Pilipinas (BSP). The data was in contrast to the 3.8-percent growth posted in December 2023 and 3.5 percent in January 2023. BSP said total cash remittances reached $2.836 billion in January 2024, higher than the $2.762 billion posted in January 2023, but lower than the $3.28 billion posted in December 2023. “The situation is the world is getting back to normal and migrants abroad have regained their bearings. There may be blips like that slower
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m-o-m growth but on the overall the world seems to be re-normalizing the hiring of foreign workers now that economies try to get back on track,” Institute for Migration and Development Issues (IMDI) Executive Director Jeremaiah M. Opiniano told BusinessMirror over the weekend. Opiniano said the month-onmonth growth will not be able to paint a full picture of the welfare of Filipinos overseas. However, it was worth monitoring economic developments in Overseas Filipino Worker (OFW) host countries. “We keep watch on the recessions in some host countries. As always though, the struggles of few countries get complemented by the
stability of other countries. So if remittances may have been fewer in some, other countries will cover for that,” Opiniano said. R i za l Commercia l Ban k ing Corporation (RCBC) Chief Economist Micheal L. Ricafort said he expects OFW remittances to continue posting single-digit growth given high inflation that is also being experienced by workers abroad. According to Ricafort, what is working for OFWs worldwide is the continuation of consumption spending in other parts of the world as the situation normalizes in these countries. Covid restrictions are no longer a policy priority for many countries, allowing the “normaliza-
tion” to continue, he added. “Risk of economic slowdown or even recession in the US, as well as in other countries that host large number of OFWs, is par t ly due to ag g ressive Fed rate hikes since March 2022 in an effort to bring down/better manage elevated inf lation back to the Fed ’s target of 2 percent,” Ricafort explained. “This would still be a drag for OFW remittances especially if there would be job losses for some OFWs, though offset by the economic reopening in China, which is the world’s second biggest economy, since December 2022,” he added. See “Remittance,” A2
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PHL EXTERNAL DEBT UP 12.7% TO $125B IN 2023 n
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By Cai U. Ordinario
Monday, March 18, 2024 Vol. 19 No. 155
P25.00 nationwide | 2 sections 20 pages |
@caiordinario
EBT service fueled by higher interest rates pushed up the country’s external debt in 2023, according to the latest data released by the Bangko Sentral ng Pilipinas (BSP). BSP said the country’s external debt increased 12.7 percent to $125.4 billion as of end-December 2023 from the $111.27 billion posted in the same period in 2022. The data also showed an increase of $6.6 billion or 5.5 percent from the $118.8 billion level as of end-September 2023. “Despite the increase in the debt stock, the external debt ratio [EDT expressed as a percentage of gross domestic product] remains at prudent levels, recording at 28.7 percent in the last quarter of 2023 from 28.1 percent in the third quarter of 2023 and 27.5 percent in end-2022,” BSP pointed out. BSP said the debt service ratio (DSR) increased to 10.2 percent in December 2023 from 6.3 percent for the same period last year.
The DSR relates to principal and interest payments, termed as the debt service burden, to exports of goods and receipts from services and primary income. “This was due to higher recorded principal and interest payments brought about by rising interest rates in 2023,” BSP said. Year-on-year, BSP said, the increase was driven by net availments of $9.2 billion, the bulk of these being net borrowings by the national government at $7.9 billion. There was also a change in the scope of the external debt to include non-residents’ holdings of Philippine debt securities issued onshore, reported in the first quarter of 2023 at $4.4 billion and prior years’ adjustments of $1.2 billion. See “PHL,” A2
OUTBOUND Overseas Filipino Workers are seen busily filling up their papers at Naia Terminal 1 before they board their plane to their country of destination. Reports said that Overseas Filipinos’ cash remittances reached $2.836 billion in January 2024, higher than the $2.762 billion posted in January 2023, but lower than the $3.28 billion posted in December 2023. Story at top of page, “Remittance growth slows to 2.7% in Jan–BSP.” NONIE REYES
RUSSIA-NATO RIFT WORRYING, M.E., TAIWAN FEARS EASE: POLL By Malou Talosig-Bartolome @maloutalosig
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USINESSES worldwide are less edgy on the Israel-Hamas war in the Middle East, and the Taiwan Strait tension. They are far more worried about the increasing tension between Russia and Nato as the Russia-Ukraine war persists. These are the latest findings in the survey conducted among 103 businesses worldw ide last March 4-12, 2024 by the UK-based Oxford Economics. The participating companies collectively employ around 6 million people and have a total turnover of around US$2 trillion. The Global Risk Survey for
March 2024 also showed that more businesses are sanguine about the prospects of nearterm global growth. However, uncertainty hovers on the question of whether the US, Europe and major central banks will ease monetary policies; the most optimistic projection is only 50bps of policy rate cuts for this year.
Geopolitical risks
ACCORDING to Oxford Economics, business perceptions about their global outlook have improved last month. Around 30 percent of businesses described the ongoing Israel-Hamas war as a “very significant risk” to the global economy over the next two years. See “Russia-Nato,” A2
Hotel owners urge House: Don’t pass wage hike bill By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
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AJOR hotel owners in the country believe the approval of a legislated wage hike will disrupt the momentum in the recovery of the tourism industry. In a letter to House Speaker Martin Romualdez dated March 14, 2024, Philippine Hotel Owners Association (PHOA) President Arthur M. Lopez said that while the stakeholders’ group recognizes the need to improve the welfare of workers, the tourism industry continues to be “fragile” and is still recovering from the Covid-19 pandemic. “Tourism numbers and revenue figures are struggling to recover,” said Lopez in a news statement sent over the weekend. “The industry is
still grappling with low tourist arrivals, decreased room occupancy rates, and subdued revenue generation compared to prepandemic levels. What is needed is a strategic and sustainable approach to economic recovery,” he added. International arrivals last year reached 5.45 million, breaching the Department of Tourism’s 4.8-million target for the year. However, this was still 34 percent less than the 8.26 million historic high arrivals in 2019. Foreign visitors also spent an estimated US$8.69 billion (P482.73 billion) in the country last year, which was 6.6 percent less than the $9.3 billion (P516.62 billion) they spent in 2019. (See, “International tourists spent $8.69 billion in PHL in 2023–DOT,” in the BusinessMirror, January 3, 2024.) See “Hotel,” A2
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HOW SHOULD ISRAEL BRING TO JUSTICE THE PERPETRATORS BEHIND THE WORST ATTACK IN ITS HISTORY?
PESO EXCHANGE RATES n US 55.3950 n JAPAN 0.3736 n UK 70.6619 n HK 7.0817 n CHINA 7.6991 n SINGAPORE 41.4633 n AUSTRALIA 36.4554 n EU 60.3141 n KOREA 0.0419 n SAUDI ARABIA 14.7712 Source: BSP (March 15, 2024)