Filipinos abroad sent a record amount of money back home in 2023 as remittances hit $33.5 billion, boosted by a stronger peso
There’s encouraging news on the economic front amid the current toxic political atmosphere.First, the country’s gross domestic product is projected to grow 6.3 percent year-on-year in 2024 to P12.8 trillion in real terms.A combination of easing inflation and a tight labor market would pump up consumer spending this year, which bodes well for the country’s consumption-reliant economy, according to the Fitch Group.With 2010 as the base year, consumer spending is projected to grow 6.3 percent year-on-year in 2024 to P12.8 trillion in real terms.That forecast is in line with expected gross domestic product growth of 6.2 percent this year, faster than the 5.6-percent expansion in 2023 but below the government’s growth target of 6.5 to 7.5 percent for 2024.Despite inflation easing back to within the government’s 2 to 4 percent target in December last year after hovering above that range for 20 months, the Bangko Sentral ng Pilipinas has deemed it necessary to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident.Second, consumer prices grew at a much slower pace in January amid better food supply, although the El Niño weather phenomenon threatens to erase some of the government’s hard-won gains in its fight to bring inflation back to manageable levels.Inflation, as measured by the Consumer Price Index, softened to an annual rate of 2.8 percent in the first month of 2024, from 3.9 percent in December, the Philippine Statistics Authority reported.The latest reading, the lowest since October 2020, matched the lower-end of the BSP’s forecast range for the month. It was also the second consecutive month that inflation eased to within the central bank’s 2 to 4 percent target after hovering above that range for 20 months.The biggest contributor to the lower CPI was the milder food price inflation, which moderated to 3.5 percent in January, from 5.4 percent in December.That was the slowest spike in food prices since March 2022, data showed, with vegetables (-20.8 percent) and meat (0.7 percent) leading the way.Secretary Arsenio Balisacan of the National Economic and Development Authority said the Marcos administration would introduce stop-gap measures, as necessary, such as allowing further imports on key commodities until the rice supply stabilizes.Three, the PH jobless rate eased to a record low of 3.1 percent in December 2023.The proportion of unemployed Filipinos to total labor force decreased to another record-low in the final month of 2023.There were 1.6 million jobless people in December 2023, down from 1.83 million in the preceding month, the PSA reported recently.This put the jobless rate at 3.1 percent, the lowest since the PSA adopted a new definition of “unemployment” back in 2005. It beat the previous record-low unemployment rate of 3.6 percent recorded in November.The underemployment rate in December 2023 was recorded at 11.9 percent, higher than the November figure of 11.7 percent but lower than the 12.6 percent rate recorded a year ago. A higher underemployment rate indicates declining job quality.Four, investment pledges from foreign firms during the presidential visits over the past 16 months are starting to come in, boosting the position of the Philippines as a premier investment destination for foreign businesses in Asia, according to the Department of Trade and Industry.Committed foreign direct investments in the country soared to a record-high in 2023, reflecting the results of the Marcos administration’s efforts to sell the Philippines as an investment destination.The government approved FDI pledges worth P889.07 billion last year, 3.7 times larger than the amount recorded in 2022, according to the PSA.The figure represents FDIs committed to the country’s ecozones, which entice investors with tax perks.The investment areas span various sectors, such as manufacturing, renewable energy, infrastructure, transport and logistics, agriculture, and retail.And five, Filipinos abroad sent a record amount of money back home in 2023 as remittances hit $33.5 billion, boosted by a stronger peso.This increase in the value of remittances helped households cope with high inflation. Cash remittances through banks totaled $33.5 billion, marking a 2.9 percent annual increase.The 2023 inflows were the highest on record or since the BSP started tracking cash remittances in 1970.At the same time, last year’s remittance growth was consistent with the central bank’s projection of a 3-percent expansion for 2023, albeit slower than the 3.6-percent uptick in 2022.All in all, there’s enough positive indications in the past year and the first two months of 2024 for the economy to continue its growth trajectory in the years ahead.(Email: [email protected])