MACROECONOMICS WEEKLY UPDATE

A stronger-than-expected El Niño, sluggish local government spending and high interest rates are among the domestic threats to the Philippines’ growth target for next year, the Finance department said on Tuesday.Finance Secretary Benjamin E. Diokno said possible “elevated prices due to inadequate food supply” is a major domestic risk to the government’s 6.5%-8% gross domestic product (GDP) growth target for 2024.He noted that a stronger-than-expected El Niño, which may last until June 2024, and the spread of highly infectious animal diseases could tighten food supply.

The Information Technology  and Business Process Association of the Philippines (IBPAP) said it is targeting 7-8% growth in staffing next year. For this year, IBPAP expects the industry to grow 8.7% in terms of staffing.In terms of revenue, the industry, which is also known as the business process outsourcing (BPO) sector, will be posting 8.8% growth to $35.4 billion this year.Under the IBPAP Roadmap, the information technology and business process management (IT-BPM) industry is targeting the creation of 1.1 million new direct jobs through 2028, bringing the total to 2.5 million.

The country welcomed over 4.8 million international visitors as of late November, surpassing the target set by the Department of Tourism (DoT) for 2023.South Korea remained the top source of foreign arrivals, accounting for 1.27 million tourists or 26.37% of the total. 

Rounding up the top five were the US with 797,181 (16.53%), Japan 272,735 (5.66%), China 242,107 (5.02%), and Australia 225,464 (4.68%).Tourism Secretary said in a statement that the visitors spent $7.2M, “underscoring the value of tourism to our economy.” She said that tourism continues to drive growth and provide incomes and jobs following the implementation of the National Tourism Development Plan 2023 to 2028. Tourism employs 5.35 million Filipinos.

INDUSTRY UPDATE

ENERGY AND POWER  

Power supply is still likely to be tight next year due to the El Niño weather phenomenon, but power firms are optimistic that conglomerate San Miguel Corp.’s (SMC) gas-fired power plants will help meet growing demand.

Aboitiz Power Corp. president and chief executive Emmanuel Rubio told reporters last week that the current 17,000-megawatt (MW) demand may increase by up to 700 MW next year.

BANKING 

UnionBank’s core strength lies in transaction banking, with 51% of their deposits originating from corporate clients, surpassing the industry benchmark of 45%. The adept manner in which they handle their transaction banking processes has led to quicker and more secure financial transactions, and has earned the trust of their corporate clients in the process.

TOURISIM

THE Department of Tourism (DoT) said government agencies need to collaborate with the private sector and the education industry to better prepare tourism and hospitality graduates for the workforce.