MANILA, Philippines - Remittances to emerging markets including the Philippines are expected to continue rising this year, Goldman Sachs said.
“Global remittances to EMs are estimated to have exceeded half-a-trillion dollars in 2013. Inflows are likely to increase in 2014 and beyond — especially to Latin America, although Asian economies will remain the main recipients,†the investment bank said in a research note.
Goldman Sachs said that by region, the top three recipients of remittances this year are South Asia (27 percent), East Asia and the Pacific (28 percent) and Latin America (15 percent).
The investment bank explained the impact of remittances to growth would be dependent on the ratio of remittances to the country’s gross domestic product and the increase in remittances.
“But as a first-pass impression, they imply that remittances can boost EM growth, but only modestly,†Goldman Sachs said.
In the first 11 months of 2013, cash remittances to the Philippines went up 6.1 percent to $20.605 billion from $19.417 billion in the same period in 2012.
The central bank expects remittances to have grown by five percent in 2013 over 2012’s $21.391 billion.
Remittances, which generally make up almost 10 percent of the country’s economic output, buoy domestic consumption.
The economy expanded by 7.2 percent last year, surpassing market and government expectations.