As Growth Rates Slow, The BSP Toys with OFW Remittance Data Anew!

The BSP has been at it again!  

Or the BSP has been fudging with OFW remittance statistics again! 

(all bold mine) 

The BSP on January remittance data: Personal remittances from overseas Filipinos (OFs) increased by 3.2 percent year-on-year in January 2016 to reach US$2.2 billion, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today…. Likewise, cash remittances from OFs coursed through banks amounted to US$2 billion in January 2016, rising by 3.4 percent from the level posted a year ago. 

On February data: Personal remittances from overseas Filipinos (OFs) reached US$2.3 billion in February 2016, higher by 9 percent than the level posted in February last year…Similarly, cash remittances from OFs coursed through banks grew by 9.1 percent year-on-year to US$2.1 billion in February 2016.

On March data: In March 2016 alone, personal remittances amounted to US$2.7 billion, 1.4 percent higher than the year-ago level. Meanwhile, cash remittances from OFs coursed through banks in March 2016 amounted to US$2.4 billion, posting a growth of 1.5 percent year-on-year.

In their April disclosure, the BSP revised all three data. And they have all been substantially downgraded!!!

January personal and cash remittance (monthly) growth rates: 1.9% and 2.1% (original 3.2% and 3.4%). February: 8.3% and 8.4% (original 9% and 9.1%). March: NEGATIVE 1.3% and NEGATIVE 1.2% (original 1.4% and 1.5%)! 

The BSP then shifted the blame on banks for such revisions: “Revised per amended reports submitted by banks”

I recently noted the BSP adjusted the entire TWO year (2014 and 2015) data set in order to shield increasing accounts of NEGATIVE growth!

The BSP’s smoke and mirror trick appears to be to post data only that have been in the positive, from which they then shout or declare G-R-O-W-T-H! And when no one seems to be looking, they considerably reduce them. The BSP seem to be hoping that people will just buy the headlines. It seems that for them, these numbers have no real world implications. 

Monetary authorities can’t seem to handle several truisms.

One, the world economy has been slowing down fast.

Two, the law of diminishing returns simply means that considering the size (over 10 million people or 10% of population), OFW growth cannot expand FASTER than the population growth forever. That’s unless authorities have tacitly been working on to significantly drain the resident population!

Three, the quality of overseas job openings may also evolve.

Fourth, currency factors play a role. Weakening currencies where OFWs are employed may see their remittance diminish.

Fifth, global political developments also matter. The rise of nationalism (anti-immigration, right wing politics) may prove to be a significant barrier to overseas employment.

Sixth, the BSP can’t seem to take into context the contributions of domestic economy. For instance, the government has been shouting at the top of their lungs that the economy continues to boom, where jobs have allegedly been growing! Yet if true, then why wouldn’t OFW growth slow? Has the government come to believe that the Philippine residents can multiply its population at the rate of how Gremlins populate?

In a genuine economic boom, where job and income substantially grows, there will be little incentives for residents to work overseas or seek migration. The fact that there remain a good number of people looking for job overseas essentially defies the government’s account of an economic boom!

Or does truth or reality need to be contorted for the simple reason that all economic sensitive statistical numbers has to remain positive?!

You see, the entire credit fueled supply side boom in the shopping malls, hotels (tourism) and housing (vertical and horizontal) have been predicated originally from OFWs. So perhaps the BSP may have been concerned that any candid announcement of theirs might prompt for a slowdown in the race to build supply that may be reflected on the GDP.

And a slowdown in the GDP should be a taboo! That’s because a magnified GDP allows the government to have generous access to credit at the lowest costs! And it’s not just the government but also politically favored firms!

Again, hardly does the BSP seem to realize communications opacity or obscurity will have real world consequences. They may fudge data to boost GDP over the short term, but eventually such costs will emerge overtime in the form of slowing sales (demand), magnified vacancies (excess capacity), financial losses, slowdown or curtailment in investments, job losses, amplified credit risks, increased poverty and more.

Some of these have become apparent today.

This shows the kind of boom mentality entrenched in the consensus.  Such mentality bears no margin of safety and have all been anchored on a riskless-one way trade. The seeming disinformation employed by the BSP only feeds to such confirmation bias.

And that’s why there will be a rude awakening. OFW data have already been showing the way!!!!