Remittances growth seen easing to 4.5% in August

MANILA, Philippines - The growth of cash remittances is seen easing to 4.5 percent in August from six percent in July, UK-based investment bank Barclays said.

In its Emerging Markets Weekly, the bank said “remittances are expected to dip given a high base,” of $1.9 billion in August last year.

Latest Bangko Sentral ng Pilipinas data showed money sent home by Filipinos living and working abroad reached $2.06 billion in July, up six percent from the $1.9 billion reported in the same month a year ago.

This brought the seven-month total to $13.48 billion, or 5.8 percent higher than the $12.7 billion in the same period in 2013.

Personal remittances – cash and non-cash items – also grew 7.1 percent to $2.28 billion in July, bringing the seven-month figure to $14.9 billion.

The robust inflows of remittances have been driven by the sustained demand for skilled Filipinos abroad, the central bank said.

Citing data from the Philippine Overseas Employment Administration, the BSP said job orders reached 540,037 in the seven months to July. Four-fifths of these jobs are for service, production, and professional, technical and related employment in Saudi Arabia, the United Arab Emirates, Kuwait, Taiwan and Qatar.

Moreover, the continuous efforts of domestic banks to expand their remittance services abroad through tie-ups and establishment of offices have supported the growth in remittances.

Remittances play a big role in supporting domestic consumption, which remains to be the largest driver of the Philippine economy.

Last year, cash remittances grew 7.4 percent to $22.9 billion, the highest annual level ever recorded by the central bank. Personal remittances, meanwhile, rose 8.6 percent to $25.35 billion.

The BSP hopes to grow cash remittances by five percent this year from the 2013 figure.