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Saturday 2014 Vol. No. 40 Sunday,18, October 11,102015 Vol. 11 No. 3
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Fitch sees recovery from decrease in growth of workers’ remittances By Bianca Cuaresma
week ahead
ECONOMIC DATA PREVIEW Foreign Exchange
n Previous week: The local currency has displayed significant strides toward the appreciation side in the previous week. The peso started its value at 46.48 to a dollar on Monday, to slightly appreciate on Tuesday at 46.47 to a dollar. The biggest change seen in the local currency was on Wednesday when the peso hit 46.14 to a dollar. The appreciating trend continued on Thursday at 46.11 to a dollar and ended the week back to the 45 territory at 45.87 to a dollar. The average trading value of the peso was at 46.214 to a dollar. The total traded volume was also significantly larger at $5.098 billion from the $3.424 billion seen in the previous week. n Week ahead: While the peso is expected to still display strength against the dollar in the coming week, ING Bank economist Joey Cuyegkeng earlier warned that risks still surround the local currency. Cuyegkeng particularly said that speculation about the looming US rate hike causes risks against currencies in emerging markets, such as the Philippines, and thus, the strength “may be temporary.”
Remittances (August)
Thursday, October 15 n July remittances: Money from Filipino migrant workers stumbled in July this year and posted a growth of 0.5 percent from the same month last year. The barely improved remittance growth is the slowest growth since January this year when remittance growth also slowed to 0.5 percent. In absolute terms, the total remittances hit $2.08 billion during the month. n August remittances: The slowdown seen in July is seen to be a “one-off” thing and is seen to recover in the months ahead. In Fitch’s recent assessment on the Philippine economic dynamics, the credit watcher said that remittances will continue to provide and offsetting factor to weaker trade numbers going forward. (See related story)
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N international credit watcher expressed confidence that the slowdown in the Philippines’s remittance inflow is temporary and will recover from the recent below 1-percent monthly growth performance in July. In its latest overall assessment on the Philippines, Fitch Ratings said that cash from Filipino workers abroad will continue to drive the current account to a surplus level this year and will offset the weakness seen in the country’s trade numbers owing to the slowing global economy. This confidence comes amid the unusually low growth seen in January and, more recently, in July. Earlier data from the Bangko Sentral ng Pilipinas (BSP) showed that the remittances from Filipino workers abroad stumbled in July to register a growth of mere 0.5 percent. This is far from the average trend growth of remittances at around 5 percent a month. This below 1-percent growth in remittances was also seen in January, when the money sent by migrant workers also hit a growth of 0.5 percent. This, Fitch said, should not be
Development banks boost funding vs climate change
a cause for worry on the country’s balance of payments position going forward. “Fitch expects the trade deficit to widen and reduce the current account surplus to 3.5 percent of GDP, but still allow the Philippines to continue accumulating next external assets and reserves. Fitch’s view assumes remittances will continue to grow steadily,” the international bank said. Remittances sent by Filipino workers abroad provide about $24 billion to $25 billion worth of fresh fuel for the Philippine economy, helping accelerate consumer spending and economic activity in the local scene. This makes money sent by Filipino migrant workers one of the pillars of the Philippine economic growth story. Fitch, however, warned that, while strength is still expected of the See “Fitch,” A2
Digitization pushed by software providers By Lorenz S. Marasigan
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HE $15.5-billion sof t ware industry could outpace the growth of the international labor market, should the Philippines continue to develop information and communications technology (ICT)-driven sectors and establish a favorable cloud-computing environment. The forecast was made by Philippine Software Industry Association President Jonathan Defensor de Luzuriaga, who spoke about the process of transforming the Philippines into a digital economy through enterprise cloud applications during the Philippine Cloud Summit last week. He said the key areas to focus on developing include the leveraging of the ICT sector to enhance the country’s competitiveness, the expansion of access to high-speed
PESO exchange rates n US 46.1250
and affordable Internet services, and the deployment of cloud services for disaster resiliency. “We have to educate our people on the digital economy,” he said. “We also have to bring Philippine talent home.” These, Luzuriaga said, could result in the industry being the “next ‘overseas Filipino worker’ phenomenon.” He did not provide a time frame, however, but said these requirements should be met “to be able to reach this status.” IP Converge Data Services Inc. (IPC) President Reynaldo R. Huergas noted that ,while the Philippines has witnessed increased cloud adoption through the years, there is a lot of room for progress. “Through the years, we witnessed an upward trend in terms of cloud adoption as more and more enterprises are beginning to See “Digitization,” A2
Ban Ki-moon (right), secretary-general of the United Nations, looks at Peru’s President Ollanta Humala on the sidelines of the World Bank and International Monetary Fund annual meetings in Lima, Peru, on Friday. AP/Rodrigo Abd
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IMA, Peru—The world’s top development banks pledged on Friday to boost their funding to lessen climate-change impact, aiming for the goal of $100 billion a year that rich countries have pledged to transfer to developing countries by 2020.
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n japan 0.3847 n UK 70.8019 n HK 5.9517 n CHINA 7.2596 n singapore 32.8456 n australia 33.2744 n EU 52.0106 n SAUDI arabia 12.3000 Source: BSP (9
October 2015)