Remittances to remain resilient amid low oil prices, Saudi conflict

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) said remittances from overseas Filipinos would remain resilient amid the tension between Saudi Arabia and Iran as well as the continued decline in oil prices.

BSP Deputy Governor Diwa Guinigundo downplayed the impact of the rising tension between Saudi Arabia and Iran on remittances, saying that it would not be as large as before.

“In the past we had the 1991 Gulf War and the 2003 second gulf war, but our overseas Filipino workers were able to move elsewhere and find alternative employment,” he said.

However, he said the flexibility of overseas Filipinos would be affected if the conflict spreads to other countries in the Middle East.

“My concern is that if the Saudi-Iran conflict extends beyond their respective borders and affect all the contiguous jurisdictions, then we will have some challenges,” Guinigundo warned.

The BSP has slashed the growth target for cash remittances to four percent instead of five percent for 2015 and 2016 due to the global economic slowdown and the depreciating currencies in host countries against the dollar.

Latest data from the central bank showed cash remittances went up 3.6 percent to $22.83 billion in the first 11 months of last year from $22.08 billion in the same period in 2014.

About 79 percent of the cash remittances came from the US, Saudi Arabia, the United Arab Emirates, Singapore, the United Kingdom, Japan, Canada, and Hong Kong.

Remittances from Filipinos based in Saudi Arabia went up 5.6 percent to $2.4 billion in the first 11 months of last year and accounted for 10.5 percent of the total cash sent home by overseas Filipinos.