Remittances growth hit 5-mo high of 3.7% in Sept

Money sent home by overseas Filipino workers (OFWs) jumped by an annual 3.7% in September, the fastest pace in five months, the Bangko Sentral ng Pilipinas (BSP) said on Monday.

Data from the central bank showed cash remittances rose to $3.12 billion in September from $3.01 billion in the same month in 2024.

This was the fastest growth since the 4% logged in April.

Month on month, cash remittances increased by 4.84% from $2.977 billion in August.

For the first nine months of the year, cash remittances sent through banks increased by 3.2% to $26.03 billion from $25.23 billion a year ago.

“The United States remained the top source of remittances to the Philippines during January-September 2025, followed by Singapore, and Saudi Arabia,” the BSP said in a statement.

Cash remittances from the US accounted for 40.4% of the total in the nine-month period.

This was followed by Singapore (7.1%), Saudi Arabia (6.4%), Japan (4.9%) the United Kingdom (4.8%), the United Arab Emirates (4.5%), Canada (3.5%), Qatar (2.9%), Taiwan (2.8%) and South Korea (2.5%).

Meanwhile, personal remittances went up by 3.8% to $3.46 billion in September from $3.34 billion a year earlier.

In the January-to-September period, personal remittances rose by 3.2% to $28.97 billion from $28.07 billion a year ago.

Personal remittances include both cash coursed through banks and informal channels as well as in-kind remittances.

Analysts said OFWs sent home more money starting September, as the holiday season approaches.

“The ‘ber’ months effect kicked in early, with OFWs sending more ahead of the long holiday season,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message.

He added that the strong labor market and a competitive peso also supported remittance growth in September.

The peso closed at P58.196 per dollar on Sept. 30, weakening by P1.066 or 1.87% from P57.13 on Aug. 29.

In September, the country’s unemployment rate improved to 3.8% from 3.9% in August. For the first nine months, the jobless rate stood at 4.1%, a tad higher than 4% in the same period last year.

“The onset of ‘ber’ months marks the start of the holiday season for Filipinos. Thus, we may expect OFWs to send their earnings to their families here for the celebrations and gatherings,” Oikonomia Advisory and Research, Inc. economist Reinielle Matt M. Erece said.

Mr. Erece said remittance growth could be faster from October to December, before stabilizing in January 2026.

“For the fourth quarter, expect remittances to stay resilient and peak in December. BSP’s 3% full-year growth target looks well within reach,” Mr. Ravelas likewise said.

The BSP expects cash remittances to grow by 3% to $35.5 billion this year.

Source: Business World

Asia – except PH – outpaces expectations in Q3

Philippines lone outlier as corruption probe, storms slowed growth; outlook cut

Asian economies exceeded growth expectations in the third quarter, with the Philippines emerging as the lone outlier as it lagged a regional upswing that has spurred outlook upgrades across its neighbors despite headwinds from higher US tariffs.

In a commentary, Khoon Goh, head of Asia Research at ANZ, said Asia’s economic expansion this year has been much better than expected, driven by front-loading of exports during the US tariff pause and higher spending on investments related to artificial intelligence.

For instance, third quarter growth in Taiwan, Vietnam and Malaysia beat consensus estimates by 1 percentage point or more, triggering upward revisions to growth projections for these economies.

Goh, however, said the consumption-reliant Philippines was the only economy to have surprised on the downside, prompting ANZ to slash its 2025 growth forecast on the country to 4.9 percent, from 5.4 percent previously.

The outlook for next year was also trimmed to 5 percent, from 5.2 percent earlier.

Zooming out, Goh said the more export-oriented economies have clearly performed better than the domestic-focused ones this year despite the global trade headwinds.

“Based on national accounts data for the third quarter reported so far, all economies apart from the Philippines have exceeded expectations,” he said.

Already, Economic Planning Secretary Arsenio Balisacan conceded that reaching even the low end of the government’s 5.5- to 6.5-percent growth target for 2025 has become “very challenging” after the economy expanded at a four-year low of 4 percent last quarter.

Figures showed state spending grew by 5.8 percent in the third quarter, the slowest pace since the same period in 2024, after the deepening corruption probe delayed public works as authorities grew more cautious in awarding contracts.

A notable weakness was also seen in consumer spending, which historically accounts for roughly 70 percent of total output.

Despite tame inflation and declining interest rates that could have bolstered households’ purchasing power, this key segment grew just 4.1 percent—a four-year low—after a series of powerful storms disrupted the local job market.

That said, there’s growing expectation now of a deeper rate-cutting cycle, with economists expecting additional easing moves from the Bangko Sentral ng Pilipinas in 2026.

But elsewhere in the region, ANZ’s Goh said Asia’s growth was likely to close 2025 on a strong note even as the export front-loading activity has ended.

“This will provide a solid base for 2026, especially with overall financial conditions in the region remaining very supportive,” he said. “As a result, the monetary policy easing cycle for Asian central banks will be coming to an end soon.”

Source: Inquirer

Sticky Philippine loan rates blunt impact of central bank cuts

The Philippine central bank has slashed its key policy rate by almost two percentage points to 4.75% since last year, but the price of a home loan from the nation’s top banks has barely budged.

BDO Unibank Inc. charges a 6% fixed rate on new housing loans for the first year, with the debt then subject to repricing, or else 6.5% fixed for five years. That’s roughly the same as the minimum offered in 2024, and rates at Bank of the Philippine Islands and Metropolitan Bank & Trust Co. show a similar trend.

Examples of home loan rates November 2025

Across Asia, as policymakers have reduced benchmark rates to support economic growth in the face of US tariffs, there’s evidence that banks aren’t fully passing on the cuts to consumers, according to Australia and New Zealand Banking Group. In the Philippines’ case, the stickiness of borrowing costs may prolong a slump that’s left its economy trailing Indonesia and China in growth.

Philippine commercial banks’ average lending rate, after dipping earlier in the year, hit 8.132% in August, up from 8.097% at the end of last year, Bangko Sentral ng Pilipinas data show. That’s as the benchmark has been cut 175 basis points since August last year.

For Philippine lenders, there’s little incentive to cut interest rates when a scandal over government graft has rocked confidence, threatening more bad loans. Demand is also weak: growth in household consumption, which accounts for more than 70% of the nation’s output, hit a four-year low in the three months through September as consumers held off spending.

“There’s this corruption scandal. Liken it to a toothache – the rest of the body feels it because everything is connected,” said Jonathan Ravelas, managing director at eManagement for Business and Marketing Services, a Manila-based consultancy. “Banks are cautious because of the economic outlook. It challenges jobs.”

“Banks are exercising prudent credit underwriting, particularly in consumer segments, to mitigate non-performing loan risks,” the Bangko Sentral ng Pilipinas said in response to questions.

It noted that a survey of bank loan officers showed most expect tighter lending standards for households in the current quarter, “citing a deterioration in portfolio profitability, a less favorable economic outlook, reduced risk tolerance, and weakening borrower profile.”

To be sure, total loans are still gaining, rising 10.5% in September from a year earlier, down from 12.2% at end-2024. And banks have eased up in some ways, with mortgage incentives including lower downpayments; waivers of application, registration and appraisal fees; or free insurance for the first year.

“We’re cautiously optimistic about where lending rates are headed. In the near term, we expect them to hold steady or dip slightly,” said Maria Cristina Go, head of consumer banking at BPI, one of the biggest in the country. “This will depend not only on the policy rates that will impact funding costs but will also consider inflation trends and asset quality.”

BDO Unibank said it expects lending rates for this year and the next two years to be “generally in the same range given current economic conditions.” And BSP data shows the rate at which banks lend to each other is declining.

The BSP says data shows lending rates “generally moved in line” with policy rate cuts, though the range and degree differed across loan types. It added that not all lenders engage in rate competition.

“I’m actually in the camp transmission is getting better,” said Euben Paracuelles, chief ASEAN economist at Nomura Holdings Inc. “It’s certainly not the lowest in the region and I would say compared to past cutting cycles, policy transmission of BSP’s latest rate cuts is improving.”

In the meantime, banks and consumers are cautious amid worsening political uncertainty. In July, President Ferdinand Marcos Jr. unveiled a major campaign against corruption, especially in flood control projects. Massive protests erupted in anger at the scale of the graft, and the government slowed public works spending to allow more scrutiny, with stocks sliding to a three-year low.

Sentiment had already been hit by a year of fierce feuding between Marcos and Vice President Sara Duterte.

The Philippines isn’t alone in seeing banks refrain from rate cuts. Bank Indonesia’s governor last month criticized banks for only cutting lending rates by 15 basis points, even as the benchmark has been reduced by ten times that. In other countries such as Malaysia, however, lending rates are required to be calibrated with policy rates. In Communist Vietnam, the government is driving state-owned lenders to extend credit as it pushes to achieve economic growth to 10% a year.

“Household credit demand has responded uncharacteristically weakly to the recent monetary policy easing cycle in Asia,” ANZ analysts led by Sanjay Mathur and Dhiraj Nim wrote in a Nov. 6 report.

Source: Business World