Metrobank sees remittances rising 7% this year

MANILA, Philippines - Cash remittances from Filipinos abroad are seen growing by as much as seven percent this year over 2013 levels, the research arm of Metropolitan Bank and Trust Co. said.

“Research forecasts annual remittances’ growth this year to still be between six to seven percent amid prospects of more positive growth in some major OFW host countries,” said Metrobank research analyst Pauline Revillas.

Money sent home by Filipinos living and working abroad went up 6.4 percent to $22.76 billion last year from $21.391 billion in 2012, breaching the central bank’s projection of a five-percent growth.

The Bangko Sentral ng Pilipinas attributed the increase in cash remittances to the steady deployment of Filipino workers abroad amid strong demand for their services.

Metrobank’s 2014 forecast is above the central bank’s assumption of another five-percent growth for remittances this year.

Global economic activity has been strengthening since late last year, the International Monetary Fund said in its latest World Economic Outlook report. This is on the back of recovery in advanced economies and still rosy prospects for the emerging markets.

The IMF slightly hiked its 2014 forecast for global economic growth to 3.7 percent from an earlier 3.6 percent, while its 2015 projection was broadly unchanged at 3.9 percent.

Revillas noted that the sustained robust inflows of remittances this year would continue to boost the country’s economic expansion, as money sent home by Filipinos abroad account for almost 10 percent of the gross domestic product (GDP).

“The outlook supports our view that GDP growth will remain solid at six percent this year, underpinned by still robust consumption spending and solid services sector,” she said.

Cash remittances largely supports domestic consumption which make up almost three-fourths of GDP.

“The support from remittances has long been significant, with 2013 remittances at 8.4 percent of GDP, given a domestic economy that is mainly consumption driven,” Revillas noted.

“The calamities that struck the Visayas region was seen as a factor that helped prop remittance inflows, in addition to the expected surge in time for the holiday season,” she added.