By Joann Santiago
An employee counts U.S. dollar bills before changing it to Philippine Pesos inside a money changer in Manila September 19, 2013. The Philippine central bank said remittances from overseas Filipino workers (OFWs) have allowed households to save money, boosting the country’s savings rate.(MNS Photo)
MANILA (PNA) – An economist of ING Bank Manila is optimistic that the Philippines’ external payments position could sustain its strength this 2016, backed by robust growth of revenues of the business process outsourcing (BPO) sector and remittances.
In a research note, ING Bank Manila senior economist Joey Cuyegkeng projects BPO sector revenues to rise by 16 percent this year to USD 25 billion.
These inflows are seen to get further boost from remittances from Filipinos overseas, which is seen to rise by three percent this year.
For May 2016 alone, Cuyegkeng sees remittances to rise by four to five percent to USD 2.2 billion, to bring the five-month amount to USD 10.9 billion.
Cuyegkeng said recent hikes in oil prices “should deliver some relief that remittances are unlikely to contract year-on-year 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,” he said.
Last April, cash remittances rose by 4.1 percent year-on-year to USD 2.2 billion while end-year growth rose by 3.1 percent to USD 8.67 billion.
In 2015, cash remittances grew by 4.6 percent, higher than the central bank’s four percent target, which in turn is also the target this year.
Cuyegkeng said combined BPO revenues and remittance inflows this year was expected to reach USD 47.3 billion this year.
”These inflows should keep the country’s external payments position healthy and would likely moderate any externally driven weakness of Asian currencies,” he added.