Vehicle sales declined 18.7% in February to 6,584 units from 8,177 units in the same month a year ago on account of rising car prices with the new excise taxes and the depreciating peso-dollar exchange rate. While sales of the passenger car segment rose, sales of Asian utility vehicles, light commercial vehicles, and luxury cars suffered sales drops. Automotive and truck manufacturers expect demand for luxury vehicles to increase with the coming elections.

Consumer prices rose at a slower pace of 4.0% in February from 4.1% in January, using 2000 as the new base year. The inflation rate for food alone remained at 3.4% in the first two months of the year. When the consumer price index is stripped of volatile items, however, the underlying or core inflation, accelerated to 4.1% from 4.0%. The depreciating foreign exchange rate and rising oil price abroad are expected to pressure transport fares and wages in the coming months.

The country’s unemployment rate worsened to 11.0% in January from 10.6% in the same month last year. As the labor force expanded 5.2% to 35.4 million from 33.7 million, the ranks of the jobless swelled 9.6% to 3.9 million from 3.6 million. New jobs generated amounted to 1.4 million (940 thousand and 466 thousand, respectively, in industry and services less five thousand in agriculture) while the number of new unemployed persons, stood at 340 thousand. As new graduates enter the labor force in April, the country’s unemployment rate may further swell to 13.0%.

Remittances from Filipinos abroad fell 5.8% to US$618.3 million in January from US$656.6 million in the same period a year ago despite a 23.3% rise in deployed workers for the same period. According to Bangko Sentral Governor Rafael Buenaventura, overseas workers could have delayed remittances on expectations of further depreciation of the peso-dollar exchange rate. According to the Philippine Overseas Employment Administration, deployed land-based and sea-based workers increased 28.7% and 0.7%, respectively, in January to 100,736 and 18,143. Delays in OFW remittances are expected to subside after the May 2004 polls.

Despite negative travel advisories on the Philippines abroad, tourist arrivals to the country grew 18.2% to 207,755 in January from 175,728 in the same month last year. The United States, Korea, and Japan account for more than half of the country’s visitors during the first month of the year. On the other hand, Hongkong, Taiwanese, and Chinese nationals are the fastest growing sources of visitors from Asia.

Growth in commercial bank lending weakened to only 0.8% in January despite vigorous demand from the mining and quarrying, and construction sectors. More than half of the P1.4 trillion outstanding commercial bank loans have been extended to the financial, real estate and business services as well as to manufacturing sectors. Bank lending grew 3.8% and 4.4%, respectively, in December and January last year.