Remittances seen to hit $22.7B in 2015

MANILA, Philippines - Remittances coursed through the Philippine banking system are estimated to reach $22.7 billion by 2015.

Money sent by overseas Filipinos is likewise estimated to expand seven percent to $20 billion in 2011.

Remittances went up 8.2 percent to $18.76 billion in 2010 from $17.35 billion in 2009.

The share of the formal sector is expected to increase versus the informal sector as banks are improving their electronic banking services such as the Internet and the mobile phone.

According to Dr. Ramon M. Quesada, Luzon will remain the primary destination of remittances or international money transfers from overseas Filipinos.

Luzon is estimated to receive P514 billion in remittances, followed by Metro Manila which is forecast to take in P222 billion.

The Visayas will take hold of P164 billion in money transfers while Mindanao will receive roughly P100 billion.

Meanwhile, the World Bank estimates that the Philippines will be receive $23 billion in 2011 from the combined contribution of the formal and informal sector.

Speaking in a recent economic forum sponsored by the East West Banking Corp. (EastWest Bank), Quesada said that remittances would continue to grow between six to seven percent per annum, while job orders averaged 8.6 percent yearly.

“The top origination of remittances will still be the Americas (Canada and the US) followed by the Middle East, which includes Kuwait, Qatar, Saudi Arabia and the United Arab Emirates,” Quesada, the chairman and chief executive officer of SB Corp., said.

Germany, Italy, Norway and the United Kingdom are among the major origins of remittances in Europe. In the Asia and Pacific region, top remittance sources will come from the host countries of Japan, Hong Kong, Singapore, Malaysia and Taiwan.

Deployment of sea-based overseas Filipinos is increasing by over 14 percent so far this year, and it is forecast to maintain in that level till 2014.

Land-based Filipinos are growing by an estimated five percent this year.

Less than a fifth of total remittances are contributions from sea-based overseas Filipinos while the rest are land-based.

Remittances account for roughly 10-percent of the country’s gross domestic product (GDP), and the top contributor to consumption growth, which in turn, is the leading driver of domestic growth.

Global remittances are likewise forecast to amount to $406 billion in 2011 to $515 billion by 2014. The World Bank expects remittance flows growing 7.3 percent in 2012, 7.9 percent in 2013 and 8.4 percent in 2014.

The top recipients of officially recorded remittances are India ($58 billion), China ($57 billion), Mexico ($24 billion), and the Philippines ($23 billion). Other large recipients include Pakistan, Bangladesh, Nigeria, Vietnam, Egypt and Lebanon.