Remittances forecast to rise 7% this year

MANILA, Philippines - Remittances from overseas Filipinos are forecast to rise by as much as seven percent this year from year-ago levels, the research arm of Metropolitan Bank & Trust Co. said.

“Remittances are likely to post solid growth this year, as improving economic data from the US and Europe is pointing to a slow but moving recovery among advanced countries,” said Mabellene Reynaldo, research analyst at Metrobank.

“Remittances will continue to support domestic consumption, which is again expected to be the main driver of this year’s economic growth,” she added.

Metrobank Research has forecast the annual growth of remittances this year to settle within six to seven percent, the analyst further said.

This forecast is faster than the Bangko Sentral ng Pilipinas’ projection of a five-percent growth this year.

In 2013, cash remittances surged 7.4 percent to $22.968 billion, the highest level ever recorded by the central bank. Personal remittances, meanwhile, grew 8.6 percent to $25.351 billion.

The robust inflow of remittances was attributed to the steady distribution of Filipino workers abroad. Data from the Philippine Overseas Employment Administration showed 1.8 million Filipinos were sent abroad for work in 2013.

Remittances made up 8.4 percent of the country’s gross domestic product last year, which hit a faster-than-expected 7.2 percent growth.

“Expect remittances to accelerate in the second half, although changes in the start of the school year for some private schools and universities may shift the timing of these flows,” Reynaldo said.

She also stressed “sustained remittance inflows are one of the factors that kept the peso from further depreciating, keeping the exchange rate within the P44-45 range for the first quarter.”

Latest BSP data showed remittances continued to increase in February due to the strong demand for Filipinos abroad. 

Personal remittances--cash and non-cash--went up six percent to $1.994 billion in February, bringing the two-month figure to $3.996 billion.

Cash remittances, meanwhile, grew 5.6 percent to $1.796 billion in February, putting the two-month total to $3.595 billion.

These remittances were primarily sent from the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, and Canada.

Aside from continuous deployment of Filipinos abroad, the central bank said expansion of bank and non-bank remittance service providers outside the country supported the growth in remittances.