Cash remittances jump 4% in April

Money sent home by overseas Filipino workers (OFWs) rose in April compared to a year earlier, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.

At $2.97 billion, personal remittances grew by 4.1 percent from the $2.86 billion posted in April 2024. It was the highest growth recorded since December 2022's 5.7 percent.

"Personal remittances to the Philippines continued to grow in April of this year as remittances from both land-based and sea-based overseas Filipinos increased," the central bank said in a statement.

Remittances, however, declined from the $3.13 billion recorded in March.

The April count pushed the tally for the first four months of 2025 to $12.37 billion, up 3.0 percent from the $12.01 billion recorded in January-April last year.

In April alone, money sent home via banks totaled $2.66 billion, 4.0 percent more than the $2.56 billion posted a year earlier but lower than March's $2.74 billion.

Cash remittances to date reached $11.11 billion, up 3.0 percent from the $10.78 billion recorded from January to April last year.

The United States continued to account for the biggest share of overall remittances at 40.4 percent, followed by Singapore at 7.3 percent; Saudi Arabia, 6.3 percent; Japan, 5.0 percent; and the United Kingdom, 4.5 percent.

Rounding out the top 10 were the United Arab Emirates (4.5 percent), Canada (3.2 percent), Qatar (2.9 percent), Taiwan (2.7 percent), and Hong Kong (2.7 percent).

The BSP qualified that remittance data by source has limitations, with the US appearing to be the main source as remittance centers in cities abroad commonly course the money through correspondent banks that are mostly located in the US.

Sought for comment, Philippine Institute for Development Studies senior research fellow John Paolo Rivera said the increase showed underlying strength in remittance flows, driven by stable overseas employment, particularly in the US, the Middle East, and parts of Asia.

"Moving forward, remittance growth is likely to remain steady, supported by demand for OFWs abroad, especially in health care, logistics, and domestic services," he said.

"The weaker PHP (peso) may also incentivize higher dollar remittances. But global uncertainties such as inflation in host countries, geopolitical tensions, and policy shifts like taxes on remittances in major markets (e.g., US) are downside risks to monitor."

Oikonomia economist Matt Erece, meanwhile, said the strong remittance growth in April was likely due to seasonal factors.

"We may continue to see stronger remittance inflows from OFWs due to the relative strength of the peso. They may be prompted to send more to maintain the same peso value they used to send," he added.

The peso has fallen against the dollar over the last two trading days and is now in P56:$1 territory after stabilizing at the P55:$1 level last month.

Source: Manila Times and Business World

Sari-sari store spending drops in 2024

Monthly spending in small mom-and-pop stores, known as sari-sari stores, fell to P689 in 2024, from the 2023 average of P781, according to tech startup Packworks, which offers apps to help store owners manage their businesses.

“Packworks’ data also showed that while Filipinos on average spent less, they visited sari-sari stores more frequently,” it said. “Last year, its network of stores recorded an average of 18 monthly transactions nationwide, up 16% from 2023,” it added.

It said the practice of tingi — the purchase of the smallest quantities possible — was apparent in the frequent visits, signaling that affordability issues are preventing consumers from buying more than they need at the moment.

“The combination of Filipinos’ smaller basket sizes and more frequent visits to sari-sari stores points to a preference for buying in smaller, more affordable portions — the essence of the tingi economy,” Packworks Chief Data Officer Andoy Montiel said.

“This behavior likely stems from consumers needing to stretch their budget further, even in a lower inflation environment. They might be opting to buy only what they immediately need, rather than larger quantities less frequently to stock up,” he added.

It added that the average monthly basket size has dwindled since Packworks started tracking the indicator in 2022.

“In 2022, the average basket size was P800, which decreased to P781 in 2023 and reached its lowest point last year. This is despite the country hitting a 3.2% year-to-date inflation rate in 2024, the lowest in four years,” it added.

Of the 1 million monthly sales transactions tracked by Packworks, the largest decrease in value was posted by Region I, or the Ilocos Region, where monthly spending fell 31% to P570.

Large declines were also seen in the National Capital Region and Region VIII, or the Eastern Visayas, which posted 28% and 25% declines monthly spending to P702 and P508, respectively.

Regions IV-A (Calabarzon) and IV-B (Mimaropa) recorded the biggest monthly basket sizes of P1,027 and P1,237, respectively. 

Last year, Region I turned in the highest number of monthly transactions at 26, followed by Region IX (Zamboanga Peninsula) with 25 and Region V (Bicol Region) with 20.

Packworks said seasoning and recipe mix items, detergent, powdered drinks, hygiene products, cigarettes, and liquor were the most commonly purchased items.

Source: Business World and Patchworks

Financial sustainability of mass transit

One of the large challenges on the horizon is how existing and future mass transit in the Philippines can remain financially viable so that services can be placed on a stable footing, and adequate operation and maintenance will be applied. This is of significant concern, especially because there are several major mass transit projects coming on stream over the medium term. The Metro Rail Transit Line 7 (MRT 7) is expected to be operational in the next one to two years. By 2032, the Metro Manila Subway and the North-South Commuter Railway are also expected to be online.

Financial sustainability of public transport operations is a natural challenge for any national agency or local government because of the expectation that fares should be kept affordable. There is likely to be constant political pressure to keep public transport fares as low as possible. For this reason, the revenue from railway fares is unlikely to cover the full cost of delivering the service. This implies that a continuing subsidy will be required so that operations do not suffer even if fare revenues fall below expenditures over a prolonged period.

If a continuing subsidy is required, the subsidy should not be dependent on the annual budget appropriated by Congress, as this could become unreliable and subject to political whim. There is therefore a need to find stable and reliable non-fare revenue sources and to earmark these for mass transit (in the same way that 'sin taxes' on alcohol and tobacco are channeled into funding vital and continuing health services). There are three substantial sources of revenue that can help to fund the possible financial deficits of mass transit operations: parking levies; congestion charging/congestion pricing; and traffic violation fines.

Parking levies: Free or very low-cost nonresidential parking spaces in urban centers are "magnets" for traffic; they attract increased motor vehicle use. In busy urban centers, there is a need to manage the demand for parking spaces as well as to compensate the rest of society for the added road congestion due to the availability of these spaces. There is ample justification for introducing a daily levy or tax on each nonresidential parking space in a crowded urban area, to be collected whether or not the parking space is used.

In Greater Manila, where there are over a million nonresidential parking spaces available, the revenue potential from a parking levy is considerable. A million nonresidential parking spaces, each subject to a daily levy of P100 would generate P100 million per day, enough to subsidize several million public transport trips daily.

Congestion pricing, whereby vehicles are charged a fee (collected like a toll) for entering the center of a city or a busy corridor or district, can help to reduce the demand for private vehicle use while providing a revenue stream that can support public transport development and operations.

The experience of New York City is instructive. In an article (found in www.curbed.com) titled "How Well Is Congestion Pricing Doing? Very," these were the highlights for the first 100 days of congestion pricing: complaints about car honking dropped 70 percent; rush-hour delays at the Holland Tunnel dropped 65 percent and travel time through it fell 48 percent; the number of cars entering Lower Manhattan fell by 6 million compared to a year earlier; traffic-related injuries in the congestion zone dropped by half; Metro-North ridership rose by 8 percent; and visitor counts in business improvement districts increased by 1.5 million year over year.

Clearly, congestion pricing offers an effective mechanism for curbing the demand for use of motor vehicles while providing a steady revenue stream that can support mass transit operations.

Fines and penalties for traffic violations are another rich source of additional revenue that could help keep public transport financially viable while maintaining affordable fares. The key is to bring back the camera-based no-contact apprehension system and fix any remaining legal and technical constraints. Cameras at every busy intersection or street corner will pay for themselves many times over, while altering driver behavior for the better. This mechanism will provide another meaningful stream of funds to support reliable and adequate public transport while keeping driver behavior in check.

Just as important as setting up the infrastructure for modern mass transit schemes is the establishment of funding mechanisms to ensure that public transportation will not be a burden on the national budget. This means, early on, putting in place the additional sources of revenue — parking levies, congestion pricing and fines from traffic violations — that will provide a steady, predictable stream of funding to cover the likely operating deficit.

Source: Manila Times