We are approaching the third month of the US and Israel’s war against Iran and what we now have is a deadlock.
As I write this, US President Donald Trump has warned that Iran has two to three days to reach a deal that would end the conflict; otherwise, it would face a fresh round of attacks.
For us here at home, the warnings from analysts are grim. Some are raising the stagflation flags with full-year economic growth seen below four percent. (I think even at that, they’re still being optimistic). Others are sounding the alarm on potential social unrest as the cost of living continues to rise.
April inflation is as scorching as the summer heat at 7.2 percent while the peso continues to tumble past the 61-to-the-dollar level.
The Boston Consulting Group (BCG) paints three scenarios on a 12-month horizon.
The first is a durable de-escalation where the Strait of Hormuz reopens. This may allow our monetary authorities to pause rate hikes and possibly even cut rates in the fourth quarter while the peso firms toward P57 to P59.
The second scenario is a protracted disruption with partial openings that persist. “The pattern observed since late February persists. Periodic ceasefire windows produce partial price unwinds; each incident or re-closure restores most of the premium,” BCG said in its report.
This could push Philippine inflation above seven percent in the second quarter and the BSP could hike rates by a further 50 to 100 basis points, possibly via an off-cycle move. The peso, in turn, could depreciate to as much as 62 against the dollar.
The third scenario is a structural closure or direct attacks on Saudi Arabia, the United Arab Emirates and further Qatari loading terminals, as well as a widening of the US-Iran exchange.
This, BCG said, would require an emergency BSP action. The peso could hit 65 and mass OFW evacuations would likely be triggered. The Philippine economy for the whole year may slow to 1.5 percent to 2.5 percent.
“At this point, scenario B remains the most likely, but we all know that the situation can change quickly,” BCG said.
It advised businesses to quantify exposure to the various costs brought about by the conflict, reprice and re-hedge fuel, debt, inputs and other costs and stabilize liquidity by accelerating collections, etc. – all easier said than done.
In all, BCG said the country’s energy import dependency is a national security exposure, not just an economic inconvenience.
How this crisis will end is still uncertain. We can only hope this crazy and ugly war finally ends.
Would you retire in the Philippines?
We may not know it, but many foreigners are choosing to retire in the Philippines.
There are former ambassadors, retired businessmen and ex-government officials who are enjoying their sunset years in the country. There’s a former member of the parliament of a European country, for instance. And a member of a famous American pop trio.
Indeed, the world may be in chaos, but the Philippine Retirement Authority (PRA) continues to entice foreign retirees to settle in the Philippines.
It makes sense for them – and for us, too, says Roberto Zozobrado, PRA CEO and general manager, during a recent chat.
For one, retirees get a Special Resident Retiree’s Visa, a special non-immigrant visa which entitles the holder to reside permanently in the country.
Benefits include permanent residency, multiple entry and indefinite stay, exemption privileges including exemption from travel tax and separate work or student permits, discounts and privileges from PRA merchant partners, assistance in transacting with government agencies and a PhilHealth special rate.
Those who are qualified to retire in the country are foreign nationals, former Filipino citizens and their dependents.
Zozobrado said PRA continues to exert efforts to attract more foreigners to the country as it also means investments and an economic boost for the Philippines.
Asked why foreigners love to retire here, Zozobrado said it is because Filipinos are warm and welcoming, can speak English and the country has a mix of natural beaches and mountains.
The Philippines, in fact, was honored by TripZilla as Asia’s Best Retirement Destination in a ceremony in February.
Zozobrado said the honor belongs to every retiree who has chosen to build a life in the country.
As of May, there are roughly 61,000 foreign retirees in the Philippines, with around 4,000 new retirees added each year.
Zozobrado said PRA wants to entice more every year, possibly reaching 4,700.
For retirees, settling in the Philippines also makes sense because of the low cost of living.
Rent, consumer goods and food products are all significantly cheaper in the Philippines vis-à-vis most pensions of Europeans or Americans, making the country an affordable place to live for these retirees.
Retirement hotspots
Some favorite places are Dumaguete, a city in Negros Island known for its stunning natural environment, laid-back lifestyle and ample health care facilities.
Dumaguete also has access to both beaches and mountains.
Bacolod and Cebu, which are both scenic and cosmopolitan, also have thriving communities of foreign retirees as these places have easy access to health care.
Of course, the PRA, through proper monitoring, also makes sure that these retirees comply with the laws of the land and do not endanger Filipino citizens, Zozobrado assured.
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