BSP keeps remittance targets

MANILA, Philippines -  The Bangko Sentral ng Pilipinas (BSP) kept its remittance growth guidance at four percent for this year amid the diplomatic crisis in the Middle East as well as the immigration policy of US President Donald Trump. 

Zeno Ronald Abenoja, director of the central bank’s Department for Economic Research, said cash remittances from overseas Filipinos are expected to expand by four percent to a record level of $28 billion this year from $26.9 billion last year. 

For the first four months, cash remittances rose 4.2 percent to $9.04 billion from $8.67 billion in the same period last year. 

Major sources of remittances are the US, Saudi Arabia, the United Arab Emirates, Singapore, Japan, UK, Qatar, Hong Kong and Canada. 

BSP Deputy Governor Diwa Guinigundo said the remittance growth target was retained despite the possible impact of the diplomatic crisis in the Middle East as well as Trump policies on the amount of money sent home by overseas Filipinos. 

Investors have expressed concerns over Trump’s inward looking policies as well as anti-globalization sentiments that could affect remittances as well as the earnings of the business process outsourcing (BPO) sector in the Philippines.

Guinigundo also said authorities are closely monitoring developments in the Middle East as well as its impact on oil prices, inflation and remittances. 

The Gulf has been hit by its biggest crisis in years after Saudi Arabia, the United Arab Emirates and Bahrain severed ties with Qatar for allegedly supporting Islamist groups. 

“Of course the problems in Qatar could exacerbate. What’s going on in terms of the oil industry. But on the basis of the recent forecast, of supply and demand, Qatar being not as big as an exporter of oil as Saudi Arabia and UAE we would expect that the impact of Qatar will not be as big as if problems emanate from, let’s say, in Iran or in Saudi Arabia,” he said 

About 80 percent of the amount of money sent home to the Philippines in the first quarter came from the US, Saudi Arabia, United Arab Emirates, Singapore, Japan, United Kingdom, Qatar, Kuwait, Hong Kong and Canada. 

Middle East emerged as the second biggest source of cash remittances with $1.97 billion from January to March, next to Americas with $2.51 billion. 

Remittances from Saudi Arabia inched up 2.2 percent to $676.09 million from $661.35 million followed by the United Arab Emirates that surged 20 percent $572.87 million from $477.36 million, Qatar that jumped 35.2 percent to $306.03 million from $226.32 million, and Kuwait that retreated by 12.3 percent to $196.3 million from $226.1 million.