PH incomes can match Europe level – in 2050

The catch is that it won’t be happening anytime soon.

England-based research and advisory company Oxford Economics said in a report released on Wednesday night that it expects Manila residents’ incomes to approach the European level by 2050, as it highlighted the rapid ascent of Asian cities within global value chains and the “closing” gaps in living standards between emerging and developed economies.

Oxford Economics associate director Liam Sides and senior economist Christopher Reynolds said Manila is projected to add more than a million jobs in business services from 2025 to 2050.

In cities like the Philippine capital, they said such roles have expanded far beyond call-center work to include higher-skilled positions in IT, software development, data analytics, and other technical fields, offering both better pay and career growth.

High-value services

Sides and Reynolds said three other Asian cities — Delhi and Mumbai in India and Shenzhen, China — are expected to see similar gains, reflecting a broader shift in the region toward high-value service employment.

While job growth in business services has also been strong across the Middle East, the two analysts said it was Asian markets “that have dominated growth in business services since 2010 — and they will continue to do so.”

“Indeed, cities across Asia are becoming both significantly more populous and wealthier. In terms of the overall increase in high-income households between 2025 and 2050, Asian cities take eight of the top 10 spots globally,” they added.

Wide gap

Latest figures from the Philippine Statistics Authority show that the average annual income of families in Manila reached P482,490 in 2023, well above the national average of P353,230.

The income increase in Manila marked a 16.7-percent rise from 2021, the last year the triennial household survey was conducted. That slightly outpaced the 15-percent growth recorded nationwide.

Meanwhile, families in the wider National Capital Region earned an average of P513,520 in 2023, nearly 23-percent higher than in 2021.

The European Commission’s Eurostat policy department puts the average income of its residents at €37,860 a year (equivalent to P2.6 million at the current exchange rate).

Laggard

Among the nine major Asian cities analyzed in the report, Manila will be the slowest to catch up.

Estimates from Oxford Economics showed that Manila’s projected income growth would make it “increasingly comparable,” but not fully on par with European averages, over the next 25 years.

On the other hand, Shanghai, Beijing, Bengaluru, Hyderabad, Shenzhen, Jakarta and Mumbai are all expected to surpass average European city living standards, while Ho Chi Minh City could reach parity.

In India, Hyderabad and Bengaluru are expected to surpass the European average for personal incomes before the end of the next decade, with Mumbai following before the end of 2050. 

Jakarta is projected to follow a similar trajectory, supported by Indonesia’s abundant natural resources and its relatively young, highly skilled workforce.

“Overall, these shifts represent a dramatic reversal, with people in China, India, and Indonesia returning to more similar levels of income relative to Europe, as they had before the Industrial Revolution,” Sides and Reynolds said.

“Convergence in global living standards is not inevitable,” they added.

Source: Business World

Philippines officially exits from EU ‘high risk’ money laundering list

The Bangko Sentral ng Pilipinas (BSP) on Tuesday vowed to continue efforts to combat financial crimes, after the Philippines officially exited the European Union’s (EU) list of countries that are at “high-risk” for money laundering.

“The BSP remains firmly committed to driving financial sector reforms, strengthening anti-money laundering/countering terrorism and proliferation financing (AML/CTPF) supervision, and building a resilient, inclusive financial system that supports economic growth and global confidence,” BSP Governor Eli M. Remolona, Jr. said in a statement.

Mr. Remolona, who also chairs the Anti-Money Laundering Council (AMLC), said they are working on identifying areas where the Philippines can further uphold its commitment to combat financial crimes and maintain global standards.

On June 10, the European Commission approved a regulation that removed the Philippines and seven other countries from its list of “third countries” that were flagged as facing a “high risk” of money laundering and terrorism financing. This regulation took effect on Aug. 5.

The European Commission had welcomed the progress made by the Philippines, Barbados, Gibraltar, Jamaica, Panama, Senegal, Uganda and the United Arab Emirates in strengthening the effectiveness of their AML/CFT (countering the financing of terrorism) regimes.

“Based on the available information, the commission concludes that Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, Uganda and the United Arab Emirates no longer have strategic deficiencies in their AML/CFT regimes,” it said.

In February, the Financial Action Task Force (FATF) removed the Philippines from its list of jurisdictions under increased monitoring for dirty money risks, after a successful on-site visit and completion of the recommended action plan.

The Philippines was also removed from the United Kingdom’s list of high-risk third countries last March.

The country was on the FATF’s “gray list” for over three years or since June 2021. This had resulted in the Philippines’ inclusion in the EU’s list of high-risk jurisdictions and the UK’s advisory list, which meant being subjected to stricter customer due diligence measures by member states for business relationships or transactions, the Anti-Money Laundering Council has said.

The BSP said the Philippines’ exit from the FATF as well as the UK and EU watchlists “signals growing international confidence in the Philippines’ AML/CTPF regime.”

“This development is expected to generate benefits, including lower remittance fees and improved relationship of Philippine banks with foreign counterparts, which drives business activities,” it added.

Analysts said the BSP’s commitment to anti-money laundering reforms is “highly significant.”

“It signals to global investors, banks, and regulators that the country is serious about maintaining the integrity of its financial system,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said. “This enhances investor confidence, reduces transaction costs, and improves access to global financial markets.”

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said the BSP’s move shows “sustained vigilance and proactive governance in financial regulation.”

“To maintain global AML/CTPF standards and avoid future listings, the BSP can enhance its risk-based supervision, particularly over high-risk sectors like casino junkets and designated nonfinancial businesses,” Mr. Asuncion said.

“Strengthening digital surveillance tools, improving inter-agency coordination with the AMLC and law enforcement, and regularly updating regulatory frameworks in line with evolving FATF standards will be key to sustaining momentum and ensuring long-term compliance,” he added.

The AMLC earlier said it is pushing amendments to the Anti-Money Laundering Act as part of efforts to ensure the Philippines will remain off the FATF’s gray list.

Source: Business World

European firms see growth in PHL trade, investment over next 4 years

Most European firms doing business in the Philippines are expecting trade and investment to increase in the next four years, according to a report by the European Chamber of Commerce of the Philippines (ECCP).

The ECCP, in its 2024 Business Sentiment Survey Report released, collected 150 responses from ECCP member companies between November and early December.

According to the report, 85% of the respondents said that they expect the level of their trade and investment to increase in the next four years.

Meanwhile, 11% expect no change, and 3% are projecting a decline.

Around 81% of the respondents also expressed plans to expand over the next four years, while 7% said they expect to contract.

According to the ECCP, 69% of the respondents cited the Philippine economic recovery and growth opportunities as factors behind expansion plans.

“This optimism is supported by the country’s strong economic fundamentals, including positive GDP growth in recent years and in the first three quarters of 2024,” the ECCP said.

Some 63% of the respondents also cited the stable government and political system as behind any expansion plans.

Some 64% of the companies surveyed said the Philippines has increased importance in terms of revenues in the last two years.

The survey also examined the Philippines’ attractiveness as an investment destination, supplier market, and end-user market over the last two years, with 59% saying conditions have generally improved compared to elsewhere in the region.

According to the report, respondents have an overall positive expectations for the Philippines over the next four years.

“They anticipate continued economic growth driven by initiatives such as public-private partnerships, robust private consumption, rising investment spending, a growing population, and improved infrastructure, among other factors,” it said.

“Respondents also expected foreign investments to come in with the passage of several economic liberalization laws, such as the amendments to the Public Services Act, Retail Trade Liberalization Act, and the Foreign Investment Act,” it added.

However, the report cited the need for the government to “adopt a more proactive approach” in addressing corruption, accelerating digitalization, and streamlining regulations.

In particular, 75% of the respondents cited significant barriers to investment and business activity in the Philippines.

“This suggests that addressing these obstacles is crucial for further economic growth and attracting foreign direct investment,” the report concluded.

Source: Business World