Back to business please

With the national election done and over with and most of our newly elected lawmakers and local government officials proclaimed and sworn into office, can we please all get back to business? And when I say get back to business, I mean the economy...not political “business” or monkey business (of course with a lot of prayers for good luck to that).

We all know that part of the fascination with the election result, especially in the Senate, is the next phase of the Duterte saga, with analysts now trying to discern how an impeachment attempt against Vice President Sara Duterte will play out in the chamber and if the Duterte camp will be able to muster enough votes to block any move to unseat the VP who is widely believed to be a strong contender for the 2028 presidential election.

Perhaps, while most of us were temporarily fascinated by the outcome of the just passed elections and the unexpected inclusion of what could possibly be a glimmer of opposition – and an interesting rejection of another “entertaining” lineup of lawmakers...news about lower investment inflows, a dip in remittances and tourists arrivals came out, but seemingly had no impact on the general public.

The Department of Tourism or DOT reported that 1,167,908 foreign travelers visited the Philippines in the first two months of 2025, a 0.6 percent drop compared to the first quarter of 2024. Over a quarter or 25.31 percent of the total figure came from South Korea with 295,611 tourists, based on DOT data as of March 1, 2025. South Korea has been the Philippines’ top source of tourists since 2023.

Following South Korea was the United States with 229,836 travelers, Japan with 83,208 tourists, Canada with 65,145 visitors and Australia with 61,564 guests. The Philippines also welcomed 53,545 tourists from China, 41,388 from Taiwan, 34,451 from the United Kingdom, 29,352 from Singapore and 21,252 from France.

As for foreign investment inflows, according to the press announcement of the Philippine Statistics Authority or PSA, total foreign investments approved in the first quarter of this year amounted to P 27.99 billion, reflecting an 82 percent decline compared with the P155.26 billion FI recorded in the same period of 2024.

Seven out of 13 investment promotion agencies (IPAs) reported foreign investment approvals during the period. These are the Authority of the Freeport Area of Bataan, Bases Conversion and Development Authority, Board of Investments, Clark Development Corporation, Cagayan Economic Zone Authority, Philippine Economic Zone Authority and the Subic Bay Metropolitan Authority.

South Korea was the leading source of FI pledges in the first quarter of 2025, with commitments amounting P12.36 billion, or 44.2 percent of the total approved FI. The US followed with P3.08 billion (11 percent) and China with P2.88 billion (10.3 percent). Please take not that with the US now insisting that it wants manufacturing to return to America, investments from these three countries may drop further in the future.

Real estate activities attracted the largest share of foreign investments, amounting to P10.79 billion (38.5 percent). This was followed by the manufacturing industry with P6.14 billion (21.9 percent) and administrative and support service activities with P5.35 billion (19.1 percent). The Philippine real estate sector, unfortunately, is now experiencing a glut that some analysts predict may take years to recover.

Total approved investments from both foreign and Filipino nationals in the first quarter of 2025 reached P181.93 billion, a 43.7 percent decline from the P 323.27 billion reported in the same quarter of 2024. Filipino nationals contributed P 153.94 billion or 84.6 percent of the total approved investments.

The electricity, gas, steam and air conditioning supply industry secured the largest share of total approved investments, amounting to P 61.98 billion (34.1 percent). This was followed by the manufacturing industry with P 38.24 billion (21 percent), and real estate activities with P 34.98 billion (19.2 percent).

Approved investments from both foreign and Filipino nationals in the first quarter of 2025 are expected to generate 31,848 employment, representing a 4.7 percent decline from the 33,431 employment projected in the same period of 2024. Of the total expected employment, 19,303 (60.6 percent) are attributed to projects with foreign interest. These figures are further complicated by the continuing clamor for higher wages which employers always counter may result to their own demise or fewer workers.

Likewise, continuing disruptive news about US President Trump’s continuing economic threats on tariffs and most recently about plans to impose a tax on remittances sent by foreign nationals to their home countries would weigh negatively on the Philippines which relies heavily on such remittances from our overseas Filipino workers. While overseas Filipinos are spread out all over the world, most of their remittances are transacted in US dollars which would thus have to pass through American bank conduits and could thus be subject to the planned tax Mr. Trump is proposing.

According to the Bangko Sentral ng Pilipinas or BSP, personal remittances from overseas Filipinos (OFs) rose by 2.6 percent to $3.13 billion in March 2025 from the $3.05 billion registered in March 2024. Both land-based and sea-based workers contributed to the increase in remittances.Cumulative remittances reached $9.40 billion in Jan-March 2025, marking a 2.7 percent increase from the $9.15 billion recorded in Jan.-March 2024.

Of the personal remittances from OFs, cash remittances coursed through banks reached US$2.81 billion in March 2025, reflecting a 2.6 percent increase from the $2.74 billion recorded in March 2024. On a year-to-date basis, cash remittances rose by 2.7 percent to $8.44 billion in Jan.-March 2025 from the $8.22 billion registered in Jan.-March 2024.

Even though there are plenty of assurances that the Philippines is not a major exporting country and that the announced tariff of 17 percent that the US may impose is much lower compared to our ASEAN neighbors, there is really still no firm agreement between us and the US as trade talks continue.

Perhaps by the second quarter of this year, those three key economic data will give us a clearer picture of where the Philippine economy is headed, but before that, can we now all get back to business?