BSP confident remittances to grow 5% despite August setback
MANILA, Philippines —The Bangko Sentral ng Pilipinas (BSP) anticipates cash remittances to pick up steam in the last quarter despite booking its first monthly decline in 12 years last August.
BSP deputy governor Diwa Guinigundo said the state central bank is confident of meeting its 5% growth target for remittances this year despite a letdown in August.
"I believe remittances will continue to be stable at around 5% for 2015. In the last quarter of the year, we expect renewed heavy inflows because of the holidays," Guinigundo said.
The BSP has set a 5% growth target in the value of remittances from overseas Filipinos this year.
Cash remittances increased by 5.9% to $24.35 billion last year from $22.98 billion in 2013; while personal remittances went up by 6.3% to $26.97 billion from $25.37 billion.
Cash remittances, meanwhile, climbed only by 4.1% to $16.21 billion from January to August this year, compared to $15.57 billion in the same period last year.
Personal remittances inched up by 3.9% to $17.93 billion in the first 8 months of the year from $17.27 billion in 2014.
This was after cash remittances slid by 0.6% to $2.04 billion in August from $2.06 billion last year due to the depreciation of the euro, Canadian dollar, and the Japanese yen against the US dollar.
This marks the first time since April 2003 that the amount of money sent home by Filipinos overseas contracted by 10.9%.
But personal remittances from Filipino workers with contracts of one year or more also retreated by 0.9% to $2.26 billion in August from $2.28 billion in the same month last year.
The central bank said the weakening of other currencies reduced the US dollar equivalent of remittances sent from host countries.
Other currencies have been weakening against the US dollar amid the impending interest rate hike by the US Federal Reserve that is putting renewed pressure on emerging economies with investors withdrawing their cash to seek better returns in the US.
The global economic slowdown led by China is causing uncertainties in the global financial markets.
Guinigundo said the demand for skilled Filipino workers overseas remained robust.
"We continue to see robust deployment to different regions and territories. Filipino skills remain in big demand. Despite the soft global growth, overseas Filipinos continue to find opportunities because of their diversified skills and competencies," he said.
Recent data from the Philippine Overseas Employment Administration (POEA) showed total job orders reached 584,816 in the first eight months of the year.
The Philippines is the third-leading recipient of remittances in the world after India and China, with about 12 million Filipinos are working abroad.