DUBAI: Filipino expats might have to consider increasing the money they send home, to help their families keep up with the unabated rise in prices of basic consumer goods, which has diminished whatever benefits they gained from the recent favorable exchange rate, analysts say.
“The higher inflation reduced the purchasing power of Overseas Filipino Workers (OFWs) and their families, eroding whatever OFWs gained from the higher US dollar/peso exchange rate that increased the peso equivalent of their remittances about 4.5 percent year-on-year and about 7 percent since the start of 2018,” Michael L. Ricafort, head of the economics and industry research division at Rizal Commercial Banking Corporation told Arab News.
OFWs have benefitted from the peso’s weakness against the US dollar, but the gains might have been offset by the reduction of purchasing power due to elevated inflation, Guian Angelo S. Dumalagan, market analyst at Land Bank of the Philippines, said.
“Using the inflation in August of 6.4 percent, OFWs and their families might just be better off by just 0.6 percent,” Dumalagan told Arab News.
The government on Wednesday reported that headline inflation rose by 6.4 percent year-on-year in August – the highest in nine years – from 5.7 percent a month earlier and 2.6 percent in August last year. The August inflation rate also exceeded the 5.9 percent forecast given by Philippine monetary and finance authorities.
Remittances from overseas Filipinos in June meanwhile fell to their lowest levels in three months to $2.61 billion, 5 percent down from $2.75 billion of the same month last year. Monetary authorities said the biggest declines in cash remittances were recorded in the United Arab Emirates, Saudi Arabia and Kuwait during the said period.
“An unfortunate confluence of cost-push factors continues to drive consumer price inflation in August beyond the acceptable target range. Much of it has to do with food supply shocks, rice in particular. These warrant more decisive non-monetary measures to fully address,” Nestor Espenilla, Jr, Governor of the Bangko Sentral ng Pilipinas, said.
“We also need to consider external developments and US Fed actions to the extent these exert undue pressure on the peso. Under the circumstances, we will weigh the need for further monetary policy action,” the central bank governor added.
Higher food prices, which make up more than a third of the consumer price index, had a major contribution to inflationary pressures in August. The retail prices of rice were up by at least 10 percent year-on-year, pushed by a shortage of cheaper rice in the market; corn prices were up by as much as 20 percent in some areas of the country; sugar prices rose as much as 20 percent since the start of the year.
“The government, particularly the Department of Agriculture, must act quickly and fervently with a sound judgment to ease the increasing prices of agricultural commodities which are the main drivers of inflation,” Socioeconomic Planning Secretary Ernesto M. Pernia said. “The NFA should fast-track the distribution of remaining inventories, alongside the completion of the government’s 250 thousand MT rice imports from Thailand and Vietnam in the last week of August to build its rice inventory, a necessary step to temper inflation.”
The National Food Authority is a government agency responsible for ensuring food security in the Philippines and the stability supply and price of rice, the country’s main staple. Aside from shipping in more rice, the government is also planning to import fish, particularly round scad, as some municipal waters impose fishing bans in their areas between October to February and allow fish stocks to be replenished.
The analysts are however hopeful that inflation levels might have peaked in August, and would begin to taper off by the end of the year.
“It is possible that the higher-than-expected inflation rate of 6.4 percent in August is already the peak and the inflation rate for the remaining months of 2018 could be slower and linger at or near 6 percent levels, before easing to between 4 percent and 5 percent in the early part of 2019,” Ricafort said, as the residual effect of the new tax law implemented in January eases.
“Efforts of government to address supply issues should eventually moderate price pressures. But the impact of second-round effects would still have to be reflected in production costs and retail prices,” ING Bank senior economist Joey Cuyegkeng said.
Former president and current House of Representatives Speaker Gloria Macapagal Arroyo, who is also an economist, also said the high inflation rate should not be a cause for alarm as “the government was doing what it can do to address it.”
“Hopefully this will be the peak. Conceivably even a sharp increase can be resolved, but we have to analyze what is driving it and therefore address what is driving it,” Arroyo added.
Nine-year high Philippine inflation rate could hit OFWs’ pockets
Nine-year high Philippine inflation rate could hit OFWs’ pockets
- OFWs have benefitted from the peso’s weakness against the US dollar, but the gains might have been offset by the reduction of purchasing power
- Remittances from overseas Filipinos in June fell to their lowest levels in three months to $2.61 billion
OPEC+ moves to set 2027 production baselines
RIYADH: OPEC+ announced on Wednesday that it will establish a framework to determine new oil production baselines for 2027, marking a significant step in its long-term planning, said an official statement.
The alliance — comprising the Organization of the Petroleum Exporting Countries and partners including Russia—has been negotiating revised production baselines for several years. These baselines serve as reference points from which member states adjust their output levels.
According to the statement issued following the group’s meeting, said it had tasked the OPEC Secretariat with developing a mechanism to assess each country’s maximum production capacity. These assessments will form the basis for 2027 production targets across all member nations.
Since 2022, the group has implemented three tiers of output cuts. Two remain in place through the end of 2026, while the third is being gradually phased out by eight participating countries. No changes were made to the group’s current production policy at Wednesday’s session.
Due to the sensitive nature of the discussions, all sources spoke on condition of anonymity.
The 2027 baselines, once finalized, are expected to guide production policy after the current round of cuts expires.
Oil prices, which dipped below $60 per barrel in April—the lowest level in four years—following OPEC+’s decision to accelerate May output and amid trade tensions triggered by US tariffs, have since rebounded to around $65.
Saudi Arabia launches advanced manufacturing center to boost industrial innovation
JEDDAH: Saudi Arabia has launched the Advanced Manufacturing and Production Center, a key initiative aimed at accelerating the Kingdom’s industrial transformation through the adoption of advanced technologies and sustainable practices.
Unveiled on May 28, the center is set to play a central role in promoting efficiency, flexibility, and growth within the manufacturing sector. It will utilize technologies associated with the Fourth Industrial Revolution to localize production and enhance Saudi Arabia’s competitiveness on the global stage.
The initiative also supports strategic industries while aligning with the objectives of Saudi Vision 2030, the country’s long-term plan to diversify its economy. A major focus is encouraging private sector collaboration to speed up the integration of emerging technologies into industrial operations.
The launch supports the National Industrial Strategy, introduced in October 2022, which aims to increase the number of factories in the Kingdom to approximately 36,000 by 2035. The strategy is designed to attract investment, scale up local production, and strengthen non-oil exports.
The Ministry of Industry and Mineral Resources is overseeing several projects to advance the Kingdom’s industrial and logistical infrastructure, positioning Saudi Arabia as a key player in global manufacturing and trade.
“Adopting the latest industrial technologies raises the efficiency of our industrial sector and enhances its competitiveness regionally and globally,” said Khalil bin Ibrahim bin Salamah, deputy minister of industry and mineral resources for industrial affairs, in a post shared by the ministry on X.
In an accompanying video, the ministry reiterated the center’s significance in meeting national goals: “The Advanced Manufacturing and Production Center opens doors to industrial investment opportunities and stimulates the sector to adopt new manufacturing technologies within industrial facilities.”
The center is supported by several initiatives and programs, including the Future Factories Program, which aims to modernize 4,000 factories across the Kingdom. The FFP focuses on integrating advanced manufacturing systems to boost efficiency and build more resilient supply chains—particularly in critical sectors such as food and petrochemicals.
According to its official website, the center serves as a hub for industrial innovation, providing consultancy services, training, and technological solutions. It is dedicated to fostering sustainability and competitiveness across the manufacturing sector.
Through these efforts, the center is expected to significantly contribute to Saudi Arabia’s Vision 2030 goals by localizing high-tech capabilities, attracting investment, and advancing the industrial sector’s role in the nation’s economic diversification.
Closing Bell: Saudi main index rises to close at 11,052
RIYADH: Saudi Arabia’s Tadawul All Share Index advanced on Wednesday, closing higher by 127.58 points, or 1.17 percent, to reach 11,052.76, reflecting broad market optimism.
Trading activity remained robust, with a total turnover of SR4.57 billion ($1.21 billion). Of the listed stocks, 202 posted gains while 44 declined.
The Kingdom’s parallel market, Nomu, also recorded gains, rising 340.91 points, or 1.28 percent, to close at 26,932.95. The market saw 48 advancing stocks against 34 decliners.
Meanwhile, the MSCI Tadawul 30 Index climbed 15.12 points, or 1.08 percent, ending the session at 1,413.70.
Fawaz Abdulaziz Alhokair Co. emerged as the session’s top performer, with its share price jumping 5.77 percent to SR16.50.
Ataa Educational Co. and Kingdom Holding Co. followed closely, gaining 5.46 percent and 5.22 percent to close at SR61.80 and SR8.66, respectively.
On the downside, United Carton Industries Co. registered the steepest decline, falling 4.87 percent to SR46.85. Banan Real Estate Co. dropped 2.4 percent to SR4.48, while Nama Chemicals Co. slipped 1.78 percent to SR27.55.
On the announcements front, Saudi AZM for Communication and Information Technology Co. disclosed it has submitted a request to transfer its listing to the main market.
Additionally, the initial public offering for Flynas Co. began on May 28 and will conclude on June 1. The offering is priced at SR80 per share, with a retail tranche comprising 10.25 million shares. According to a statement, BSF Capital is the lead manager.
Alkathiri Holding Co. announced that its subsidiary has signed a 50-year lease agreement valued at SR143 million with the Asir Region Municipality to develop a commercial and hospitality project in the city of Abha.
According to a statement published on the Saudi stock exchange, the project will feature a four-star hotel with a capacity of 180 keys, alongside retail and entertainment facilities. The development aims to boost tourism and enhance commercial services in the Asir region.
The lease will officially begin upon the land handover by the Investment Committee of the Asir Region Municipality.
Shares of Alkathiri Holding closed Wednesday’s trading session at SR2.06, marking a 1.96 percent gain.
In a separate disclosure, Mufeed Co. announced that its board of directors has recommended to the ordinary general assembly the transfer of its statutory reserve balance — totaling SR3.49 million, as reported in the financial statements for the year ended Dec. 31, 2024 —to retained earnings.
Saudi Arabia’s Asir region revitalizes 95% of stalled projects
- Asir is a vast region in the Kingdom with a population exceeding 2 million people
- Interest from global players seeking early opportunities in the region’s evolving landscape has grown
ABHA: Saudi Arabia’s Asir region has successfully revitalized 95 percent of its previously delayed project, an important milestone that is strengthening investor confidence as the region moves forward with SR29 billion ($7.73 billion) worth of initiatives across various sectors.
In an interview with Arab News, Hashim Al-Dabbagh, CEO of Asir Region Development Authority, stated that a dedicated committee, chaired by Asir Gov. Prince Turki bin Talal, was formed several years ago to tackle long-standing investment challenges that had stalled progress in the region.
“The total number of cases that have been brought to this committee to address has been 63, all brought to the table,” Al-Dabbagh said.
He continued: “Of these 63 cases that have been brought to this committee to address and to solve, 60 cases have been solved, and three are in the pipeline right now, and they’re working on them, and they’re going to solve them relatively soon.”
Of the 60 resolved, 57 were concluded with outcomes that satisfied investors, reflecting a resolution rate of nearly 95 percent.
“This committee and the work that they have done has created some very positive vibes across the investment ecosystem in Saudi Arabia, which you sense in this forum because there are some very large investors that are coming to Asir, some coming back to Asir which had not been interested in this region in the past,” Al-Dabbagh said.
The board operates in collaboration with various public and private entities, including ASDA, the Ministry of Investment, the Ministry of Tourism, the Tourism Development Fund, and King Khalid University, ensuring a unified approach to accelerating investor activity in the region.
This resolution mechanism plays a key role in supporting the region’s development strategy, which focuses on unlocking investment potential across various sectors.
“First of all, we have a strategy that drives everything that we are doing,” Al-Dabbagh said.
He added: “The strategy has been approved by the center of government, and it says that Asir should be a year-round preeminent destination, so already we know that we need to focus on the tourism sector and complementary and adjacent sectors to the tourism sector. That’s one, and that gives us a lot of momentum in working with the government ecosystem and the private sector.”
Al-Dabbagh emphasized that Asir is more than just a tourism destination, noting that it is a vast region in the Kingdom with a population exceeding 2 million people.
“Within the Asir Development Authority, we have a whole department called Economic Development Department, and they are working diligently this year on sectoral studies across the board.”
He added: “This includes, obviously, tourism-related sectors, but also other ones, so just as an example, we are looking at sports, we are looking at construction. We’re looking at fisheries and agriculture. We’re looking at renewable energy. We’re looking at mining among other sectors.”
The authority is also aligning its economic strategy with educational institutions to ensure the region’s workforce is equipped to meet the demands of upcoming sectors.
“We are working closely with King Khalid University, the TVTC (Technical and Vocational Training Corp.), Bishop University, and other educational institutions to align the strategies and to make sure that their graduates are able to find jobs in the opportunities that are going to be realized as we realize this strategy,” he said.
On attracting investments, Al-Dabbagh stated: “What I call the investment ecosystem in Asir, it’s the framework that we use to assess investments, is comprised of three components. The first component is the Invest in Asir committee, and that’s headed by Prince Turki in his capacity as the chairman of the Aseer Development Authority and includes all the public and private sectors.”
He explained that the region offers a compelling opportunity for early movers due to its untapped potential, strategic government backing, and the ability to enter key sectors before they reach full maturity, providing investors with a critical advantage in shaping long-term development.
“Asir relative to those mature, tourism destinations, offers relatively less mature areas, so when they’re coming in, they’re coming in early and they’re going to have a ... not a first mover advantage, but an early mover advantage compared to people that are going to see this place for five years or 10 years down the road when all these incumbents are already on the ground.”
Attracting FDIs
Foreign direct investment is also gaining momentum in Asir, with growing interest from global players seeking early opportunities in the region’s evolving landscape.
“One of the speakers in today’s forum was Fatih (who is managing partner of FTG Development), and they are looking at an investment worth billions in Asir. That is just one example, and foreign direct investors, they look for successful local investors to partner with,” Al-Dabbagh said.
He concluded: “Our doors are open. We’re very happy to meet with the investors from anywhere.”
EU lifts economic sanctions on Syria
BRUSSELS: The European Union lifted economic sanctions on Syria on Wednesday in an effort to support the country’s transition and recovery after the toppling of former president Bashar Assad.
The move follows a political agreement reached last week by EU foreign ministers to lift the sanctions.
The EU will keep sanctions related to Assad’s government and restrictions based on security grounds, while also introducing new sanctions against individuals and entities connected to a wave of violence in March, the Council said.
“The Council will continue monitoring developments on the ground and stands ready to introduce further restrictive measures against human rights violators and those fueling instability in Syria,” it added.
