Remittances to hit record $27.7 B next year

Up 4% from projected 2016 level

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) sees a sustained four percent growth in cash remittances next year amid strong demand for skilled Filipino workers abroad.

Zeno Ronald Abenoja, director at the BSP’s Department of Economic Research, said cash remittances would hit $27.7 billion in 2017 or $1.1 billion higher than the projected record level of $26.6 billion this year.

“For 2017, it is expected to sustain its growth at four percent. This takes into account the continued demand for Filipino workers overseas,” he said.

Abenoja said the central bank retained the four percent growth target for cash remittances to $26.6 billion this year from $25.6 billion last year.

Latest data from the BSP showed remittances coursed through banks went up by four percent to $22.12 billion in the first 10 months of the year from $21.27 billion in the same period a year ago.

The US, Saudi Arabia, United Arab Emirates, Singapore, UK, Japan, Qatar, Hong Kong, and Kuwait accounted for more than 80 percent of the total cash remittances from January to October.

For October alone, the amount of money sent home by overseas Filipinos contracted by three percent to $2.1 million as currencies in countries hosting Filipino workers continued to weaken against the US dollar.

Remittances from sea-based Filipino workers fell 11.1 percent due to stiffer competition in the supply of seafarers particularly from East Asia and Eastern Europe while that of land-based workers also slipped 0.6 percent.

Top countries that contri-buted to the decline in total cash remittances in October were Saudi Arabia, Singapore, Hong Kong, Italy, Malaysia, Netherlands, and the United Kingdom.

Remittances from the UK declined 5.9 percent even as the volume of remittances in original currency increased by 16.5 percent. On the other hand, remittances from Italy, Germany, Greece, and the Netherlands declined both in US dollar equivalent and original currency.

BSP deputy governor Diwa Guinigundo said the recovery of oil prices in the world market amid the plan of the Organization of the Petroleum Exporting Countries (OPEC) to lower global production would result to higher deployment of overseas Filipinos in oil-rich countries.

“Our rate of deployment continues to grow, although a little bit more modest. It continued to grow because of the profile of the skills that we send abroad,” he said. 

The commitment to reduce global oil production resulted to a dramatic jump in oil prices to above $50 per barrel level.

He said the economic recovery as a result of higher prices would allow oil-rich countries to hire more Filipino workers.

“That is a lot of material value to the stability of our remittances,” he added.

There are about 10 million Filipinos working overseas who send money to their loved ones in the Philippines accounting for about 10 percent of the country’s domestic output as measured by the gross domestic product (GDP).