My father’s Bubuwit

Imagine my surprise when I received a lengthy message on my phone from one of my father’s friend and Bubuwit. Back in the days of my dad, Louie Beltran, he used to refer to his informants and sources as Bubuwit.

Some of them could be reporters, Cabinet members, businessmen or government officials who did not want to be featured or mentioned but often provided useful information for the public.

I was surprised and honored at the same time because this particular Bubuwit has reached the heights of power, worked for presidents, has held high positions in government and is an established expert in economics and finance.

The phone call for me was like being called by your Economics and Math professor rolled into one. I must have done something right in life to be called by him, considering it took me multiple attempts to pass Math 11 as well as Econ 101.

It turns out that my dad’s friend wanted to share findings that he and his research team have arrived at, in response to news articles concerning possible US recession and opinions given as to how this would impact the Philippines.

The expert in economics and finance also reacted to news articles as well as the suggestion of the Bangko Sentral ng Pilipinas that the improvements and increases at the NAIA might affect local  inflation.

My dad’s Bubuwit is apparently concerned that such projections on a possible US recession could illicit negative reactions or discourage people regarding the near future, etc. I hope that by printing the message people would have reason to be more optimistic.

Dear Cito,

We would like to share with you a quick reaction, prepared by our research team, on a news article about the impact of a potential US recession on the Philippines. The article was published today (March 20, 2025). (Publication omitted by me)

It is still too early to confirm whether the US economy would enter recession in the coming months. However, should this happen, the Philippines, like any other country, would be affected, given the massive size of the US economy and its influence on global trade and investment.

The potential slowdown in the US economy would directly impact the Philippines in several areas:

1) Exports. In 2024, the US remained the Philippines’ top export destination at $12.1 billion, accounting for almost 17 percent of the country’s total exports. The recession could reduce demand for the country’s main exports to the US which include semiconductors, textiles, garments, coconut oil, etc.

2) Remittances. In 2024, the US remained the biggest source of OFW remittances at $14.0 billion, representing 40 percent of total remittances. The slowdown in US economy could force companies in the US to lay off workers, affecting Filipinos working in sectors like manufacturing.

To mitigate the impact of a potential US recession or any major economic shock, we have highlighted in the past the need to diversify the country’s growth drivers. This can be done by revitalizing the agriculture and manufacturing sectors.

Developing the agricultural sector through improvements in the supply chain is crucial for food security and managing food inflation, while reviving the manufacturing sector, including MSMEs, could generate quality jobs for Filipinos.

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On the news article about the impact of NAIA fee hikes on inflation, we note that while the approved increase in terminal fees at NAIA could lead to higher airfares in the near term, the BSP emphasized that its impact on overall inflation is still minimal.

This is because the weight assigned to air transport in the consumer price index (CPI) basket remains small at 0.08 percentage point, according to the Philippine Statistics Authority.

Air transport has a small weight in the CPI basket because households in general do not spend much on airfare for travel relative to their overall expenses in a given year.

To compare, road transport has a larger weight of 4.3 percentage points in the CPI basket since households typically spend more on commuting for jeepneys, buses, taxis, etc. This means that adjustments in road fares would have a bigger impact on overall inflation.

What we should be monitoring more closely, and as indicated in the BSP report, is the movement in global oil prices. Based on BSP projection, inflation could breach the two to four percent target range if Dubai crude oil prices were to average $100 per barrel in 2025 and $85 per barrel in 2026.

Lastly, the hike in passenger terminal fees is part of the overall plan to upgrade and modernize the NAIA. It was included in the terms of reference for the bidding of NAIA rehabilitation, prepared by the Asian Development Bank.

This ongoing modernization of the airport, along with the planned major improvements in domestic transport connectivity such as the subway, would attract more tourist arrivals in the Philippines and significantly boost the economy.

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I sincerely thank my father’s friend and Bubuwit for going out of his way to share the above materials and analysis, because it helps clear things up in this season of disinformation, news manipulation and reputation sabotage.

Given all the possibilities, nothing is better than preparing for the storm or addressing the real problems. We need food security. If the government can’t do it, do it for yourself. The high price on tourism is from airfare, not airports! Food and fuel inflation is what keeps people home. PH.Gov needs to go on a serious diet! Congress should put up our own DOGE: Department of Government Efficiency!

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