Thursday, 2 July 2009

Philippine central bank says remittance growth possible

P. G. MONTECILLO, Reporter

THE AMOUNT of money sent home by Filipinos working abroad could rise this year, bucking observers’ expectations of a contraction and official forecasts of zero growth.

Continued demand for overseas Filipino workers (OFW) in other countries, which is expected to offset a downturn in the United States, could lead to a positive remittance result, the Bangko Sentral ng Pilipinas (BSP) said.

"Remittances for the full year 2009 are expected to exhibit a flat growth even with the mounting concerns about the effects of the recessionary conditions in the global economy," the central bank said in a newsletter released yesterday.

"[But] with the continued growth in remittances for the first four months of 2009, the projected flat growth for the full year 2009 is turning out to be relatively conservative," it read.

"While there are expectations that remittances could contract in 2009, there are favorable developments that provide some reason for optimism."

The BSP cited data from the Philippine Overseas Employment Administration which showed demand for OFWs from countries such as Canada, Bulgaria, Australia, the United Arab Emirates and Qatar.

The BSP also noted a trend of countries shifting to higher-skilled OFWs who receive better pay and conceivably will send more money home.

Latest central bank data showed remittances up by 2.6% to $5.5 billion in the January-to-April period from a year earlier. They reached a record high of $16.4 billion last year, or a 13.7% growth over 2007.

Both the International Monetary Fund and the World Bank expect remittances to the Philippines to decline by 4% this year as the global economic downturn threatens OFW employment.

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