Money sent home by Filipinos working overseas is expected to grow by at least 3 percent annually over the next four years, providing a strong foundation for a sustained economic growth, an economist from the local unit of ING Bank of the Netherlands said.
ING Bank senior economist Joey Cuyegkeng said in a report remittances would likely grow “by at least 3 percent this year and average 3 to 4 percent in the next four years.”
“OFW remittances and outsourcing revenues would almost equal each other this year and together would amount to more than $51 billion this year,” Cuyegkeng said.
He said outsourcing revenues were expected to rise 15 percent to 16 percent this year. It said for the next four years, growth in outsourcing revenues was expected to average 15 percent.
Remittances fuel economic growth and account for almost 10 percent of gross domestic product in the country. The Philippines belongs to the top three countries with strong inflows of remittances, behind India and China.
Data from Bangko Sentral ng Pilipinas showed that in the first quarter of 2016, cash remittances grew 4.4 percent to $6.55 billion from $6.28 billion a year ago, on sustained demand for skilled Filipino workers abroad.
Remittances rose 1.5 percent in March to $2.42 billion from $2.39 billion a year earlier, the slowest monthly growth since the 1.3-percent expansion in September 2015.
Cash remittances from both land-based and sea-based workers grew 5.3 percent and 1.5 percent year-on-year, respectively. More than three-fourths of cash remittances came the United States, Saudi Arabia, the United Arab Emirates, Singapore, Hong Kong, the United Kingdom, Japan, Qatar and Kuwait.
Personal remittances, which include non-cash items, also grew by 4.3 percent in the first quarter to $7.2 billion from $6.9 billion. In March alone, personal remittances grew 1.4 percent to $2.67 billion from $2.64 billion last year.
Preliminary report from the Philippine Overseas Employment Administration showed that total processed contracts reached 2.3 million in 2015, of which 1.2 million were deployed in the same year.
Cash remittances grew 4.6 percent to a record $25.767 billion in 2015 from $24.628 billion in 2014, surpassing the 4-percent growth projection of Bangko Sentral ng Pilipinas. It also accounted for around 10 percent of gross domestic product in 2015.
Bangko Sentral retained the 4-percent growth target for remittances in 2016.
Cuyegkeng aid the country’s growth prospects remained favorable, especially after the Budget Department announced that the first-quarter infrastructure spending increased by 52.8 percent year-on-year.
First-quarter GDP grew by 6.9 percent, faster than 5 percent a year ago and the revised 6.5 percent in the fourth quarter of 2015, on robust domestic demand and election-related spending.