Bangko Sentral ng Pilipinas reduced the growth forecast on remittances from migrant Filipino workers this year to 4 percent from the earlier estimate of 5 percent due mainly to the US dollar’s strength against other currencies.
The 5-percent growth forecast was made in May which, according to Bangko Sentral officials, was a conservative estimate for the year.
“The growth of overseas Filipino remittances in 2015 is seen to decline slightly from 5 percent to 4 percent with the continued dollar appreciation relative to the currencies of major host countries,” Bangko Sentral said in a statement.
“However, continued remittances from OFs are still expected on account of the steady deployment of OF workers, greater diversification of country destinations and shift to higher-skilled types of work,” it said.
Remittances fuel private consumption and are one of the backbones of economic growth. Cash remittances in 2014 posted a record-high $24.308 billion, 5.8-percent higher than $22.968 billion in 2013. They also accounted for 8.5 percent of gross domestic product in 2014.
Remittances are seen to provide support to the country’s balance of payments position, alongside tourism earnings and business process outsourcing revenues. The balance of payments is expected to post a surplus of $2.2 billion in 2016 from the expected $2 billion in 2015.
Remittance growth in October this year was almost flat, hitting $2.232 billion from $2.228 billion a year ago. The figure brought cash remittances in the first 10 months to $20.640 billion, or 3.7 percent higher than $19.910 billion a year ago.
“Cash remittances from land-based and sea-based workers grew 3.9 percent and 2.9 percent, respectively. The bulk of cash remittances came from the United States, Saudi Arabia, the United Arab Emirates, Singapore, the United Kingdom, Japan, Canada, and Hong Kong,” the bank regulator said.
Combined remittances from these countries accounted for more than 79 percent of total cash remittances that were reported by banks.
The growth of personal remittances, which include non-cash items, was almost unchanged at 0.2 percent to $2.467 billion from $2.462 billion on year. The figure brought personal remittances in the first 10 months to $22.833 billion, 3.5 percent higher than the $22.064 billion a year ago.
Personal remittances from land-based workers with work contracts of one year or more rose 3.9 percent while those from sea-based and land-based workers with work contracts of less than a year increased 3 percent.
Bangko Sentral said remittance inflows were backed by the steady deployment of skilled manpower, as well as the efforts of banks and non-bank remittance providers to expand their international and domestic market coverage through tie-ups abroad.