Setbacks

For two straight years now, the Philippine economy performed weaker than expected. It grew by 5.6 percent last year, missing the government’s six to 6.5 percent target, only slightly better than the 5.5 percent economic performance in 2023, which was lowered from 5.6 percent and which was also below the government’s six to seven percent target for that year. It was also short of the 7.6 percent recorded in 2022.

More than the numbers, Filipinos are feeling the pinch. Try doing your usual grocery run and you will easily notice that prices of your usual food items continue to skyrocket. Prices of gasoline remain unabated. Prices of utilities such as water also increased at the start of the year.

Against this backdrop, what is the Marcos administration doing to resolve our economic woes? It has been implementing measures to make available rice at P29 per kilo but what about the rest of the commodities?

Prices of agricultural goods continue to sell at high prices, something that industry sources said should be blamed on the cartel.

New normal

Commenting on last year’s growth, NEDA undersecretary Rosemarie Edillon said the country faced numerous setbacks like extreme weather events, geopolitical tensions and subdued global demand, similar to the challenges we encountered in 2023. 
She said this is now the new normal and therefore, the Philippines, she said, must build resilience to cope with these setbacks.

The agriculture sector in particular faced several setbacks, particularly between late October until mid-November, when six typhoons struck the country in succession. These extreme weather conditions led to a 1.8 percent year-on-year contraction in the agriculture, forestry and fishery sectors in the fourth quarter of 2024, she said.
Manufacturing likewise grew by only 3.1 percent in the fourth quarter, hampered by subdued global demand due to geopolitical tensions and the slow recovery of advanced economies.

To cope with the challenging times, the government will look at other sectors to drive growth. Tourism and the IT-BPM sector are among the areas the government is eyeing, Usec. Edillon said.

New tourism products, such as those under experiential tourism, for instance, are being developed.

“In the information technology and business process management (IT-BPM) sector, we will strengthen our talent pipeline through reskilling and upskilling programs, ensuring that the workforce remains competitive in high-value services. This will also support the recovery of the real estate sector, which has been affected by shifts in workplace preferences,” she said.

The government needs to act fast. Its current slow pace of interventions is dragging the economy down.

Foreign investments are not coming in because of corruption and bureaucratic cobwebs. Most of what the government is trumpeting now are approved pledges and it will take time before we feel its impact, if they do decide to invest in the Philippines.

As it is now, business chambers are saying that the Philippines is not getting investments as much as our ASEAN neighbors such as Vietnam, Malaysia and Thailand.

The proposed P200-per-day wage hike may make things worse for the economy. For one, it is inflationary and we doubt that small and medium enterprises will be able to afford it. Actually, even big businesses are already warning against it.

Agribank at the forefront of consolidation

Good news for Agribank, the bank under the Ropali Group of Companies.

I learned that the Monetary Board last month approved the consolidation of four rural banks – Agribusiness Rural Bank Inc., Banco Alabang Inc., Rural Bank of Maddela and Rural Bank of San Jacinto (Masbate) Inc.

The result is a unified institution known as Agribusiness Banking Corp., a rural bank which will carry the same business name, Agribank.

Constituent banks applied under the BSP’s Mergers and Consolidation of the Rural Bank Strengthening Program, which is part of BSP’s broader and continuing efforts to boost the resilience of the rural banking industry.

Expansion

Combining their network, the consolidated bank will initially operate 43 branches nationwide and plans to expand its presence to 100 branches in the next five years.

“This consolidation reflects our commitment to work together as one, united by a shared purpose – to empower our clients and promote financial inclusion in the rural banking sector,” said Agribank president and CEO Danny Boy Antonio. “By consolidating, we are not just combining resources – we are building a stronger institution, equipped to offer innovative, convenient and inclusive financial services.”

He also highlighted digital transformation as a key priority, which is all about modernizing banking by introducing digital services to the public.

JTI Philippines names new GM

JTI Philippines has announced that it has named Guilherme Silva as its new general manager effective January 2025.

It’s a comeback for Silva who was marketing director in the Philippines in 2011. He has since held various leadership roles across other JTI markets – as head of JTI Cambodia in 2014, GM of JTI Malaysia in 2016, marketing and sales vice president of the Western Europe Region in 2018 and, most recently, GM of the Iberia cluster of Spain, Portugal, Canary Islands, Andorra and Gibraltar since 2020.

“I am excited to be back in the Philippines to lead a very dynamic market where JTI is now the country’s fastest growing tobacco company in terms of market share. I look forward to seeing how we continue to grow our portfolio and business through product innovation and consumer-centric programs,” says Silva.

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Email: eyesgonzales@gmail.com. Follow her on Twitter @eyesgonzales. Column archives at EyesWideOpen on FB.