MANILA, Philippines – The country is expected to see a sustained robust inflow of remittances amid an improving global economy and as Filipinos abroad are expected to send more money to their families following recent calamities.
The research arm of the Metropolitan Bank and Trust Co. said in a weekly report that remittances growth is expected to hit six percent this year, faster than the five-percent assumption of the Bangko Sentral ng Pilipinas.
“Research forecasts annual remittances growth this year to be at six percent amid prospects of more positive growth in some major OFW (overseas Filipino workers) host countries,” the bank said.
Money sent home by Filipinos living and working abroad summed up to $16.480 billion in the nine months January to September, up 5.8 percent from the $15.571 billion recorded in the same period last year.
Metrobank noted that aside from rosy prospects in countries with a big number of Filipino workers, the 7.2-magnitude earthquake and the Super Typhoon Yolanda that devastated the Visayas region are expected to boost remittances.
“The recent calamities that struck the Visayas region is seen to further prop remittance inflows as we close the year, in addition to the expected surge in time for the holiday season,” Metrobank noted.
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Last year, remittances amounted to $21.391 billion, 6.3 percent higher than the $20.117 billion seen in 2011.
The continued growth in remittances this year is foreseen to further boost the country’s economic output as money sent home by Filipinos abroad support consumption.
“The support from remittances has long been significant at almost 10 percent of GDP (gross domestic product) given a domestic economy that is mainly consumption driven,” Metrobank said.
“The outlook supports our view that GDP growth will remain strong at seven percent this year, underpinned by still robust consumption spending and solid services sector,” the bank added.
The economy has already grown by 7.6 percent in the first half, faster than the government’s six to seven percent target this year.
While the recent natural disasters are expected to have a impact on economic output, the government is confident growth will still settle within the target range.