Everybody seems upbeat in this joyous season. We’ve had a good noche buena or midnight feast, and meaningful bonding with our close kin on Christmas. We’re bullish for the coming New Year—the best way to welcome 2024.
We count our blessings and thank the Lord for giving us the opportunity to share our love with our friends and neighbors and help the less fortunate ones. We weathered the challenges that confronted us this year, knowing that next year would be a better one.
The arrival of the New Year next week, or the Year of the Wood Dragon to our Chinese friends, also gives Filipinos hope. The Philippine economy is faring better than expected. It is not wanting despite rising inflation at the start of 2023. The optimist in me says that the economy will be more robust in 2024, notwithstanding the headwinds that may come.
Year-end economic data indicate that the economy is faring strong. The gross international reserves (GIR) level increased to $102.7 billion as of end-November 2023 from $101.0 billion in October.
This latest figure represents a more than adequate external liquidity buffer that is equivalent to 7.6 months’ worth of imports of goods and payments of services and primary income. The healthy reserves levels will mirror the strength of our currency, which is good news for the nation’s importers.
Vehicle sales in the Philippines rose nearly 24 percent in the first 11 months to 390,654 units from a year ago, per data released last week by the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Truck Manufacturers Association (TMA). Automotive sales are a key economic barometer. They reflect the confidence of consumers to invest in big-ticket items, such as property and condominium units.
Remittances from our overseas Filipino workers keep coming. Money sent home by Filipinos working overseas grew 3 percent in October to $3 billion from $2.91 billion in the same month last year. The October figure, per the data of the Bangko Sentral ng Pilipinas, brought the total personal remittances to $30.57 billion in the first 10 months, up 2.9 percent from $29.72 billion in the same period last year.
Remittances are another key economic indicator. They help boost our international reserves and account for about a tenth of the gross national income. They help various sectors, such as banking, real estate, transportation, retail, education and healthcare. The Philippines is the fourth largest recipient country of remittances in the world, next to India, Mexico and China.
All these positive economic numbers give further confidence to businessmen and small entrepreneurs. In fact, business sentiment remained upbeat in the fourth quarter as the overall confidence index (CI), per the latest survey of the BSP, improved to 35.9 percent from 35.8 percent in the third quarter.
“This is reflective of the increase in the percentage of optimists, which was barely offset by the increase in the percentage of pessimists,” the central bank said.
The BSP attributed the higher index to expectations of companies for an increase in demand for goods and services during the Christmas season, sustained economic recovery to pre-pandemic levels, business expansions in the utilities, trade, financial and hotels and restaurant sub-sectors, and development and launch of new products and services. Brisker consumer spending on the back of higher remittances and inbound holiday travelers contributed to the rising confidence.
More businessmen are optimistic despite concerns over the negative economic impact of the ongoing conflicts in Gaza and Ukraine, elevated inflation and higher interest rates.
Multilateral financial institutions like the International Monetary Fund (IMF) appears to be impressed with the latest economic figures coming out from nation’s regulators. The IMF expects the Philippine economy to grow 5.3 percent in 2023, 6.0 percent in 2024 and 6.1 percent in 2025.
Our economic growth, per the IMF, is expected to bottom out in 2023. It sees real gross domestic product growth to bounce back in the second half of 2023 and reach 6.0 percent in 2024, backed by acceleration in public investment and improved external demand for Philippines’ exports.
With everything upbeat, I can safely say that our economic future is more solid than before. It is also on this note that I like to thank my readers for their patience in reading my entrepreneurial insights through this column.
I am concluding my essays that started years ago here in this respected paper, BusinessMirror, with more optimism. The future is bright and I have confidence that the next generation will do better than mine. My son, Senator Mark Aguilar Villar, will take my column space starting on January 2, 2024.
To all my readers, Happy New Year!