Potential for remittance income to be cut by AI, says Diokno

November 10, 2023 - 12:42 PM
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Philippine Finance Secretary Benjamin Diokno in Pasay City, Metro Manila, Philippines, July 26, 2022. (Reuters/Lisa Marie David/File Photo)

Philippines Finance Minister Benjamin Diokno says there is potential that the remittances that help power the southeast Asian economy could be replaced by AI.

Money earned by workers overseas and sent back to the Philippines contributes approximately 9% of the country’s GDP.

Diokno told the Reuters NEXT conference in New York that his government was focused on building up skills in case jobs that contribute to the inflow of cash are replaced by AI.

Earlier, the Philippines reported that gross domestic product (GDP) grew by 5.9% in the September quarter from last year, helped by a turnaround in government spending more than offsetting a slowdown in household consumption.

Like many countries, the Philippines has been grappling with soaring inflation that has forced the central bank to aggressively raise interest rates at the expense of growth.

Diokno said he expected inflation to be within target range by the first quarter of next year.

He added that inflation was high, but coming down in what he called the fastest-growing economy in the region.

Escalating costs of food are contributing to above-target inflation, he said.

With inflation still a major challenge, the central bank said on Thursday that policy would have to remain “tighter for longer”, to anchor inflation expectations and reiterated it was ready to continue hiking rates if needed.

— Editing by Leela de Kretser; Editing by Daniel Wallis