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Money sent home by overseas Filipino workers (OFW) went up by 3.2% year on year in August, as the weaker peso drove up the value of remittances, data from the Bangko Sentral ng Pilipinas (BSP) showed.

In a statement, the BSP said cash remittances coursed through banks increased by 3.2% to USD 2.977 billion in August from USD 2.885 billion in the same month last year.

Despite the annual growth, remittances declined by 6.4% month on month from the seven-month high of USD 3.179 billion in July.

The August tally was the lowest in three months or since the USD 2.658-billion remittances in May.

“Cash remittances from overseas Filipinos continued to grow… This developed on account of higher inflows from both land-based and sea-based workers,” the BSP said in a statement on Wednesday.

Money sent home by land-based workers climbed by 3% year on year to USD 2.35 billion in August, accounting for the bulk of cash remittances.

Remittances from sea-based workers likewise rose by 3.8% year on year to USD 626 million in August.

“Cash remittances rose 3.2% year on year in August to USD 2.98 billion, supported by steady overseas employment and resilient inflows from key markets like the US, Singapore, and Saudi Arabia,” Union Bank of the Philippines  Chief Economist Ruben Carlo O. Asuncion said in a Viber message.

Robert Dan J. Roces, an economist at SM Investments Corp., said the 3.2% year-on-year increase in cash remittances in August indicates a “modest pickup” versus the 3% growth in July.

“This suggests that remittance flows have some resilience despite global headwinds, and reflects, in part, a lower comparative base or mild fluctuations in monthly flows,” he said in a Viber message.

Mr. Roces said the weak peso drives higher remittances in dollar terms as recipients “gain more local-currency value.”

“Evidence from BSP studies have highlighted the positive role of exchange rate depreciation as a driver of remittances,” he added.

In August, the peso averaged PHP 57.2525 versus the greenback, weakening from the PHP 56.7523-per-dollar average in July.

On the other hand, Mr. Asuncion said the month-on-month dip in remittances reflects “seasonal normalization after back-to-school spending and a less volatile peso.”

Meanwhile, personal remittances, which include both cash coursed through banks and informal channels as well as in-kind remittances, stood at USD 3.307 billion in August, rising by 3.2% from USD 3.204 billion a year earlier.

Workers with contracts of one year and above sent home the bulk of personal remittances at USD 2.54 billion, up 3% year on year.

Personal remittances from workers with contracts of less than one year also rose by 4% year on year to USD 690 million.

Eight-month period

In the eight months to August, cash remittances from migrant Filipinos climbed by 3.1% to USD 22.909 billion from the USD 22.217 billion posted in the same period last year.

Remittances from land-based workers grew by 3.3% year on year to USD 18.32 billion as of end-August, while sea-based OFW remittances rose by 2.5% to USD 4.59 billion.

Money sent home from the United States accounted for 40.4% of the remittances in the first eight months of the year.

This was followed by Singapore (7.1%), Saudi Arabia (6.3%), Japan (4.9%) the United Kingdom (4.8%), the United Arab Emirates (4.5%), Canada (3.4%), Qatar (2.9%), Taiwan (2.8%) and South Korea (2.6%).

Meanwhile, personal remittances went up by 3.1% to USD 25.51 billion in the eight-month period from USD 24.74 billion the previous year.

“With year-to-date growth slightly ahead of target and holiday inflows ahead, remittances remain on track to meet BSP’s full-year growth forecast,” Mr. Asuncion said.

Mr. Roces said remittances typically rise in the September-to-December period, which may boost the full-year tally.

The BSP expects cash remittances to grow by 3% to USD 35.5 billion this year. — Katherine K. Chan

Finance Secretary Ralph G. Recto has ordered the formation of a multi-sectoral working group to address tax woes raised by business leaders, the Department of Finance (DoF) said.

According to a DoF statement, Mr. Recto gave the order after a dialogue with the Makati Business Club on Oct. 14, where corporate executives flagged key policy concerns and proposed solutions to improve the investment climate.

The working group will be led by the DoF and include private sector representatives, giving the business community a chance to raise any tax concerns.

“We want to support the government in its quest to make this a very good business environment and investment destination. That’s our overall aim. We’re here to support you,” Makati Business Club (MBC) Executive Director Rafael ASG Ongpin was quoted as saying in the DoF statement. “We’re here because this government has been very open and very collaborative, and we really see the value of that.”

The meeting included representatives of multinational firms such as Mondelez Philippines, Inc.; Unilever; SGV & Co.; Pepsi-Cola Products Philippines, Inc.; the American Chamber of Commerce of the Philippines; Texas Instruments, Inc.; and e-commerce platform Shopee.

One of the concerns raised by business leaders was the implementation of Revenue Memorandum Circular (RMC) No. 5-2024, which outlines taxation of cross-border services involving foreign corporations.

In February last year, 10 business groups including the Philippine Chamber of Commerce and Industry and Management Association of the Philippines had urged the Bureau of Internal Revenue (BIR) to rescind the circular, which would raise the cost of doing business in the Philippines.

They had said the circular violates existing income tax treaties entered into by the Philippines with various countries.

“These treaties generally provide that business profits of a treaty resident shall not be taxed in the Philippines if the foreign treaty resident does not have a permanent establishment in the Philippines,” the business chambers had said.

In response, Mr. Recto pledged to review existing tax circulars and explore digital tools aimed at improving transparency and efficiency in tax assessments.

BIR Commissioner Romeo D. Lumagui, Jr., who also attended the meeting, acknowledged concerns raised over the mentioned tax memorandum and backed Mr. Recto’s proposal for amendments.

In addition, the Finance chief reaffirmed the government’s push to accelerate digitalization to curb corruption and increase efficiency in the delivery of public services to business leaders.

“The government is only 20% or 25% of the economy — you’re 75%. Today, you have more than 50.1 million people working, with more than 32 million in the private sector,” Mr. Recto said.

He also called for stronger private sector engagement in the DoF’s digitalization program, particularly in the BIR, Bureau of Customs and Bureau of the Treasury.

“Whatever support you think we can provide — inputs, technology, we’d be more than happy to do that,” MBC Chairman Edgar O. Chua was quoted as saying. — Aubrey Rose A. Inosante

The Philippine economy may see a slowdown until early 2026 as the controversy over anomalous infrastructure projects dampens government spending, Finance Secretary Ralph G. Recto said on Tuesday.

At a Senate hearing for the Department of Finance budget, Mr. Recto said growth likely slowed in the third quarter as President Ferdinand R. Marcos, Jr. implemented reforms amid the corruption scandal.

“This (slowdown) could stretch until the first quarter of next year,” he said. “The recent flood control controversy may have cast a shadow on public spending, but this is the start of a cleanup, and we only see upside over the next few months.”

In July, Mr. Marcos flagged irregularities in flood control projects and launched the sumbongsapangulo.ph website, which lets citizens report substandard or nonexistent public works.

“The President himself is the whistleblower of this controversy. And his message is clear: We will never turn a blind eye to corruption,” Mr. Recto said.

The corruption scandal sparked investigations by the Senate, the House of Representatives, Justice department, and the newly formed Independent Commission for Infrastructure. It also renewed scrutiny over the Department of Public Works and Highways (DPWH), slowed infrastructure spending, and triggered a PHP 255-billion cut in the DPWH’s budget for 2026.

“If part of the budget hadn’t been lost to corruption, the economy might’ve been growing by around 6% to 6.2%, and revenue collections from the BIR (Bureau of Internal Revenue) and BoC (Bureau of Customs) would’ve been higher,” Mr. Recto said.

Despite this, he remained confident that the economy would still meet the lower end of the government’s 5.5% to 6.5% growth goal this year.

In the first six months of the year, the country’s gross domestic product (GDP) growth averaged 5.4%.

The Finance chief also noted that weather-related disruptions affected economic activity in the third quarter.

“Our approach is anticipatory and strategic, ensuring that available fiscal space is directed toward high-impact, fast-disbursing projects to counteract the potential growth slowdown and help keep full-year GDP growth within the DBCC (Development Budget Coordination Committee) assumptions,” Mr. Recto said.

Mr. Recto said it may take the government two to three quarters “at most” to address the flood control issue but infrastructure spending will “definitely contract next year.”

Meanwhile, Economy Secretary Arsenio M. Balisacan said meeting the full-year growth target has “become harder” amid a likely slowdown in government spending and persistent external headwinds.

“But we’ll wait for the release of the third-quarter economic performance (in the first week of November) before the DBCC makes a move,” he told BusinessWorld in a Viber message on Tuesday.

The Philippine Statistics Authority will release first-quarter GDP data on Nov. 7.

More rate cuts

Mr. Recto, who sits on the Monetary Board, said more rate cuts will be “good for the economy.”

“It all depends on the lookout for inflation. For now, it looks like it will be within target, and we have reduced interest rates already. Hopefully, another rate cut,” he said.

The Bangko Sentral ng Pilipinas (BSP) last week cut its key policy rate by 25 basis points to 4.75% as it sought to support economic growth as the corruption scandal darkens the outlook.

BSP Governor Eli M. Remolona, Jr. last week left the door open for another cut at the Dec. 11 meeting, and possibly more next year.

Mr. Recto said the slowdown in global trade and the threat of a 100% US tariff on Chinese goods will be factored into the BSP’s next policy move.

Meanwhile, the government remains on track to meet its revenue target this year, the Finance chief said.

“We will hit our revenue targets for the entire year. And our revenue-to-GDP ratio is climbing, we’re already at roughly 16.5%,” Mr. Recto said. “Clearly, the problem lies on the expenditure side, not on the revenue side.”

The government aims to collect PHP 4.52 trillion this year, climbing to PHP 4.98 billion in 2026, based on the 2026 Budget of Expenditures and Sources of Financing.

However, the BIR and BoC are expected to fall slightly short of their 2025 collection goals of PHP 3.22 trillion and PHP 958.7 billion, respectively.

Mr. Recto also noted that slowing economic growth and global uncertainties such as the higher US tariffs are affecting revenue collection. — Aubrey Rose A. Inosante

The Finance Chief on Tuesday said the multibillion-peso flood control scandal prevented the Philippines from getting a credit rating upgrade from S&P Global Ratings.

“If [only] we did not have the flood control issue,” Finance Secretary Ralph G. Recto told reporters on the sidelines of a Senate budget hearing. “We met with S&P, and they were ready to give us a credit rating upgrade this year.”

The controversy, which involves “ghost” projects and fund misuse in government flood control programs, has triggered investigations by Congress, the Commission on Audit, the Ombudsman, and the Independent Commission for Infrastructure.

The Marcos administration is facing increasing scrutiny over flood control projects, where billions of pesos in public funds were diverted through padded contracts and shell companies.

The scandal highlighted spending inefficiencies and governance lapses that credit agencies closely monitor when evaluating institutional credibility and fiscal management.

Asked whether the Philippines can achieve an “A” credit rating in the next two years, Mr. Recto said: “I hope so.”

He said the government wants to maintain its current credit rating, despite the multibillion-peso corruption scandal.

“There is a big chance they will maintain it, but there was a bigger chance for a credit rating upgrade,” he added.

In November 2024, S&P affirmed its “BBB+” long-term credit rating for the Philippines, which is a notch below the “A” level grade targeted by the government.

S&P had also raised its rating outlook to “positive” from “stable.” A positive outlook means the Philippines’ credit rating could be raised over the next two years if improvements are sustained.

Mr. Recto said the government needs to improve its governance and resolve the flood control mess.

“We have to improve on that,” he added. “I’m convinced that we will be able to resolve this, it will take us a few months to make this all right.”

Additionally, Mr. Recto said that a potential reduction in the value-added tax (VAT) rate may also risk the country’s credit rating.

“A reduction will surely impact your credit rating, for sure. I leave that up to Congress,” he added.

Several lawmakers have filed bills seeking to either scrap or cut the 12% VAT rate. VAT collections account for about a fifth of the Bureau of Internal Revenue’s total revenues.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said that the flood control scandal may have delayed the Philippines’ credit rating upgrade due to governance risks.

“While it does not automatically derail the country’s trajectory toward an ‘A’ rating, it delays the momentum,” he said via Viber message.

Mr. Rivera said the government should improve accountability, demonstrate sustained improvement in public financial management, and ensure that infrastructure spending is both transparent and efficient.

“Investor and creditor confidence hinges not just on growth numbers but on how cleanly public funds are spent,” Mr. Rivera said.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said governance issues and perceived corruption significantly weigh on credit ratings.

“The recent flood control scandal certainly adds a negative perception risk, which could delay progress toward an upgrade,” Mr. Asuncion said in a Viber message.

He added that the government must address the issue and exhibit stronger transparency and accountability.

“The Philippines can still preserve its credibility and keep the path toward an eventual ‘A’ rating,” Mr. Asuncion said. “Ultimately, the signal that reforms are being implemented and governance strengthened will matter most to rating agencies.”

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said that a credit rating upgrade may still be achievable if the government implements strong reforms that would regain public trust.

“We need to show strong reforms that would bring back public trust (transparency, accountability, and governance), credible fiscal discipline, and a clear break from corruption. If we clean the house and stay the course, the ‘A’ rating is still within reach,” he said in a Viber message. —Adrian H. Halili, Reporter