Additional OFW remittances to help families back home cope with higher consumer prices

Philippine consumer prices rose 4.6 percent in May, the fastest in four years, weighing on household expenditures. (Reuters)
Updated 05 June 2018

Additional OFW remittances to help families back home cope with higher consumer prices

DUBAI: Overseas Filipino workers should consider sending additional remittances back home as a temporary back-up for their families as they deal with elevated consumer prices, and the Philippine government’s refusal to rule out the possibility of steep price hikes until year end, a migrant labor expert said.
“The prices of commodities [in the Philippines], from food to fuel, have gone up so maybe OFWs should consider sending an additional 10 percent or even 20 percent to their families especially if they can afford to do so. Everything has gone up,” Emmanuel S. Geslani said in a telephone interview with Arab News.
“The increase in oil prices [on the world market] had a domino effect on the prices of consumer items, and adding financial pressure to OFW families as it is again enrolment season and they have to pay tuition fees for their kids who go to school,” Geslani added. “I know some OFWs may also be in a difficult situation in their workplaces, but for those who can afford to send additional support, maybe they should do so.”
The government on Tuesday said headline inflation rose 4.6 percent in May — versus 2.9 percent of the same month last year — driven mainly by price increases in fish and seafood, fuel and lubricants and bread and cereals. Average inflation during the five-month stretch was at 4.1 percent, just above the government’s 2 percent to 4 percent target for the year.
“The major catalysts include higher global crude oil prices at 3.5-year highs recently; the TRAIN Law that increased taxes on fuel and other goods and services; weaker peso exchange rate and higher local rice prices,” Michael L. Ricafort, head of the economics and industry research division at Rizal Commercial Banking Corporation, told Arab News. “These factors resulted in second-round inflation effects in terms of upward adjustments in the prices of affected goods and services.”
It is a bit of consolation though as Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines’ corporate research unit, expected last month’s consumer price basket to rise by 4.9 percent.
“However, it came in at 4.6 percent. Although it is the fastest in 4 years, it is still softer compared to expectations and slower than the previous months' expansions,” Asuncion said.
Legislators and vested groups have earlier called for the suspension of the Tax Reform for Acceleration and Inclusion law, which reduced personal income tax rates but raised the excise tax on petroleum products and automobiles, after crude oil price hit $80 a barrel in global trading and consumer prices spiked.
Their clamor was hinged on the notion that ultimately households were bearing the burden of TRAIN’s immediate effects on the economy. Previous surveys have estimated that one of every 10 Filipino households have at last one family member working overseas, whose cash remittances reached $28.1 billion in 2017.
The government economic team however was confident that inflation would taper off towards the end of 2018, even as it rejected the calls for the TRAIN law’s suspension.
“Though the 4.1 percent year-to-date inflation rate is slightly above the [government] target, we are still striking distance … there is no need to adjust inflation targets,” Benjamin E. Diokno, the secretary of budget and management, said during a press briefing on Tuesday. “There is consensus among the economic managers that inflation will taper off.”
“Suspending TRAIN and adopting other band-aid solutions will only have a minimal and short-term impact on inflation and will stifle our growth, further delaying our nation’s progress toward becoming an upper-middle-income country by 2019, such that around six million Filipinos would be lifted out of poverty by 2022,” Diokno added.
Still, both Asuncion and Ricafort see inflation rates to remain elevated for the most part of the year before reverting back to pre-TRAIN levels by 2019.
“Inflation could start to normalize lower in 2019, around January and February, exactly a year after the effectivity of the TRAIN Law,” Ricafort added.

Arab News recording exposes Nissan lawyer’s lie on IMF bailout for Lebanon

Updated 01 June 2020

Arab News recording exposes Nissan lawyer’s lie on IMF bailout for Lebanon

LONDON: Arab News has published the recording of an interview with a Nissan lawyer after he denied saying that a bailout of Lebanon by the International Monetary Fund (IMF) was linked to the extradition of fugitive tycoon Carlos Ghosn.

The former Nissan chairman fled to Beirut in December from Japan, where he faced charges of financial wrongdoing.

In a story published in Arab News Japan on Saturday, Sakher El Hachem, Nissan’s legal representative in Lebanon, said the multibillion-dollar IMF bailout was contingent on Ghosn being handed back to Japan. 

The lawyer said IMF support for Lebanon required Japan’s agreement. Lebanese officials had told him: “Japan will assist Lebanon if Ghosn gets extradited,” the lawyer said

“For Japan to agree on that they want the Lebanese authorities to extradite Ghosn, otherwise they won’t provide Lebanon with financial assistance. Japan is one of the IMF’s major contributors … if Japan vetoes Lebanon then the IMF won’t give Lebanon money, except after deporting Ghosn.”

On Sunday, El Hachem denied making the comments. “The only thing I told the newspaper was that there should have been a court hearing on April 30 in Lebanon, but it was postponed because of the pandemic,” he said. In response, Arab News published the recording of the interview, in which he can be clearly heard making the statements attributed to him. 

Japan issued an arrest warrant after Ghosn, 66, escaped house arrest and fled the country.