Remittances from Filipinos working overseas and business process outsourcing receipts are expected to reach $47.3 billion this year, enough to sustain the country’s external strength, an economist said Tuesday.
ING Bank Manila senior economist Joey Cuyegkeng said in a report the combined remittances and BPO revenues in 2016 would represent a 9-percent growth from last year.
“We also expect outsourcing revenues to amount to $25 billion this year, a 16-percent increase. We have assumed a 3-percent YoY growth for OFW remittances in 2016. The combined amount of these inflows reaches $47.3 billion this year or a combined growth of 9 percent this year,” Cuyegkeng said.
“These inflows should keep the country’s external payments position healthy and would likely moderate any externally driven weakness of Asian currencies,” Cuyegkeng said.
He said remittances were expected to increase by 4 percent to 5 percent year-on-year in May to $2.2 billion, bringing the five-month remittances to $10.9 billion, or an increase of 3.4 percent from a year ago.
“The recent improvement in oil prices should deliver some relief that remittances are unlikely to contract for the whole of 2016. In addition, the deployment of higher skilled Filipinos abroad would likely support a modest growth not only this year but in the coming years,” Cuyegkeng said.
Bangko Sentral is scheduled to release the remittance data for the month of May on Friday.
Cash remittances grew 4.6 percent to a record $25.767 billion in 2015 from $24.628 billion in 2014, surpassing the conservative 4-percent growth projection of Bangko Sentral ng Pilipinas. It also accounted for around 10 percent of gross domestic product in 2015. In 2016, Bangko Sentral aims for a 4-percent growth in remittances.
Remittances grew 4.1 percent in April this year to $2.2 billion from $2.1 billion a year ago amid sustained demand for skilled Filipino workers abroad. The April expansion was also a reversal of the revised 1.2-percent decline in March. This brought cash remittances in the first four months of 2016 to $8.67 billion, up by 3.1 percent from $8.4 billion in the same period last year.
Cash remittances from both land-based ($6.8 billion) and sea-based ($1.9 billion) workers grew by 3.8 percent and 0.8 percent year-on-year, respectively. More than three-fourths of cash remittances came from the United States, Saudi Arabia, the United Arab Emirates, Singapore, the United Kingdom, Japan, Qatar, Hong Kong, Kuwait and Germany.
Personal remittances, which include non-cash items, also increased 3.8 percent to $2.44 billion from $2.35 billion a year ago. This brought personal remittances in the first four months to $9.577 billion, up 3 percent from $9.3 billion.
Preliminary data from Philippine Overseas Employment Administration showed that a total of 777,887 contracts were processed in the first four months of 2016.
DBS Bank of Singapore said at the current pace, total remittances this year were likely to hit a record $27 billion, or close to a 5-percent growth from last year.