BANGKO Sentral ng Pilipinas Deputy Governor Diwa Guinigundo is optimistic the 4-percent growth target on remittances this year is still achievable despite the $81-million money laundering report that rocked the banking system.
Several foreign banks discontinued their partnerships with money transfer operators servicing migrant Filipino workers in the aftermath of the money laundering issue.
“… We remain hopeful given the reports contrary to negative expectations,” Guinigundo said in a text message Monday. “We shall see this May when the first revision of the BoP [balance of payments] is completed. We can only say that once we see the bottom line of all these pluses and minuses,” he said.
The Finance Department said over the weekend it was pushing for changes in the Anti-Money Laundering Act after several foreign banks cut ties with money transfer operators servicing migrant Filipinos. Finance Secretary Cesar Purisima said amending Republic Act No. 9160, or the Amla law, was urgent to protect the remittances of migrant Filipinos.
Guinigundo said the reports “are anecdotes we gather from various quarters. We are processing these with other reports showing more job orders from both old and new markets for our overseas workers.”
He said Bangko Sentral was interested to find the net impact of these developments on remittances.
Latest data from Bangko Sentral showed remittances in January rose just 3.4 percent to $2.022 billion from $1.956 billion a year ago. The January expansion was slower than the 4.9-percent growth in December when cash remittances hit an all-time high of $2.47 billion.
Data from Philippine Overseas Employment Administration showed that job orders in January reached 84,670. These were intended mainly to fill in demand for service, production, and professional, technical and related workers in Saudi Arabia, Kuwait, Qatar, Taiwan and United Arab Emirates.
Bangko Sentral said earlier the efforts of bank and non-bank remittance service providers to expand their international and domestic market coverage through their network of business partners worldwide provided support to steady flows.
Some $81 million worth of funds deposited by Bangladesh’s central bank in the New York Federal Reserve was stolen by computer hackers and wired to a branch of Rizal Commercial Banking Corp. in February this year. The money was converted into pesos by remittance company Philrem Service Corp., before the money found its way to several casinos.
As of end 2015, commercial banks’ tie-ups, remittance centers, correspondent banks, and branches or representative offices abroad reached 5,424, up by 13.8 percent over the 2014 level.
Remittances fuel private consumption and are one of the backbones of economic growth. Cash remittances in 2015 grew 4.6 percent to a record-high $25.767 billion from $24.628 billion a year ago, surpassing the 4-percent target of Bangko Sentral.
Bangko Sentral kept the 4-percent growth target for remittances this year.
Bangko Sentral reviews in May and November every year the remittance forecast, along with other economic assumptions, such as the balance of payments, gross international reserves, exports, imports and peso-dollar trading average.
