MANILA, Philippines – Dutch financial giant ING Bank sees the amount of money sent home by Filipinos abroad climbing by six percent to a record level $19.8 billion this year.
ING chief economist Joey Cuyegkeng said in the investment bank’s Financial Markets Research that OFW remittances would remain strong this year.
“Philippine’s OFW remittances remain resilient with July remittances amounting to $1.7 billion. Growth of remittances this year is likely to increase by six percent year-on-year to around $19.8 billion,” Cuyegkeng stressed.
The growth forecast of ING is slightly lower than the seven percent increase to $20.1 billion set by the Bangko Sentral ng Pilipinas (BSP) for this year.
OFW remittances climbed 6.3 percent to $11.35 billion in the first seven months of the year from $10.679 billion in the same period last year on the back of the sustained demand for skilled Filipino manpower amid the economic growth concerns in the US, the debt crisis in Europe as well as the tensions in the Middle East and North African (MENA) states.
Remittances from land-based Filipino workers inched up by 4.3 percent while that from sea-based workers rose 14.1 percent in the first seven months of the year
Data released by the BSP showed that about 83 percent of the total remittances from January to July came from the US, Canada, Saudi Arabia, the United Kingdom, Japan, Singapore, United Arab Emirates, Italy, and Germany.
For the month of July alone, OFW remittances increased by 6.1 percent to $1.715 billion from $1.616 billion in the same month last year. The remittance in July was the second highest monthly record after the record monthly level of $1.737 billion booked last June.
OFW remittances went up by 8.2 percent to a new record level of $18.8 billion last year and contributed about 10 percent of the country’s total gross domestic product (GDP).
Last April, the BSP has lowered the growth target for OFW remittances to seven percent from 8.2 percent last year due to the political tensions in the MENA region as well as the disaster in Japan.
The growth is expected to further slowdown to five percent next year.
Cuyegkeng pointed out that the country’s external payments indicators, which slowing in terms of growth, remain favorable.
He pointed out that both the current account and balance of payments position of the Philippines would remain in surplus.
The BSP believes the country’s gross international reserves (GIR) level and BOP position would continue to strengthen despite the risks brought about by the sluggish US economic recovery as well as the sovereign debt crisis in Europe.
Latest data showed that the country’s BOP surplus jumped 166 percent to $9 billion in the first eight months of the year from $3.381 billion in the same period last year on the back of the strong capital inflows into emerging market economies as well as strong exports, remittances from overseas Filipino workers (OFWs), business process outsourcing (BPO), and tourism earnings.
The BOP refers to the difference of foreign exchange inflows and outflows on a particular period and represents the country’s transactions with the rest of the world.
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By: Lawrence Agcaoili
Source: The Philippine Star, Oct. 10, 2011
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