Growth in remittances eases for a second month

Growth in remittances eases for a second month

By Lailany P. Gomez, Reporter

REMITTANCES from overseas Filipino workers (OFW) continued to show strength at the start of the year, according to the central bank.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said money sent home by Filipinos abroad went up 7.6 percent to $1.48 billion in January from $1.37 billion in same month in 2010.

BSP Governor Amando Tetangco Jr. said the positive development reflected increased remittances from both sea- and land-based workers, with their transfers rising by 13.3 percent and 6.2 percent.

The bulk of inflows came from the United States, Canada, Saudi Arabia, Japan, the United Kingdom, Singapore, the United Arab Emirates (UAE) and Italy.

Cash transfers from these countries accounted for more than four-fifths, or 80.1 percent, of the total inflows reported by local banks, the BSP said.

“Remittance flows into the country remained resilient on the back of sustained demand for skilled [OFW] in different destinations worldwide,” Tetangco said.
Data from the Philippine Overseas Employment Administration (POEA) showed that of the 99,926 approved job orders for land-based workers for the period January 1 to February 28, more than two-fifths represented processed job orders for service, production and professional, technical and related workers.

Most of the processed job orders are intended for manpower requirements in Saudi Arabia, UAE, Qatar, Taiwan and Kuwait.

The Department of Labor and Employment’s office in Rome, Italy reported that a new quota decree was signed last November, allowing the entry of 100,000 foreign workers, of which 4,000 new hires were allotted to the Philippines.

The POEA also reported that the country’s seafaring industry aims to capture at least 50 percent of the global requirement in the future.

“The continued enhancement of financial services worldwide through tie-ups with foreign financial institutions, establishment of remittance centers and marketing offices abroad, as well as the stronger partnerships forged with correspondent banks and branches/representative offices abroad also helped shore up the flow of remittances into the country,” Tetangco said.

Hong Kong and Shanghai Banking Corp. (HSBC), however, said the moderate growth in remittances was “not the best start.”

Despite a sequential rebound in January, year-on-year remittances growth moderated for the second consecutive month, HSBC said.

The lender said gradual economic recovery in the West coupled with healthy growth in Asia provide support for the Philippine remittances outlook.

“Therefore, a sharp slowdown in remittances is unlikely in the near term,” Sherman Chan, an economist at HSBC, said.

“Although headline remittances growth has slowed for two straight months, it is too early to conclude that a downward trend is emerging. In fact, there are signs of improvement in January when looking at the seasonally adjusted data on a sequential basis.

Remittances are a key support to private consumption, which accounts for about three-quarters of Philippine [gross domestic product]. Therefore, we need to keep a close watch on the remittances data when assessing the country’s overall outlook,” she added.

With the Middle East accounting for only roughly 15 percent of Philippine remittances in the past five years, HSBC said economic developments in the West and in Asia still carry larger implications.

“Hence, we do not expect a slowdown in remittances from the Middle East to weigh too heavily on overall growth. Indeed, with the Philippine peso likely to appreciate through the year, and overseas Filipino workers keen to maintain the level of remittances in local currency terms, we may even see a pickup in remittances in US dollar terms in coming months,” Chan said.

The BSP had said its policy-making Monetary Board will review its remittance growth target as well as its forecast for the country’s external payments position in light of the troubles in the Middle East.

For 2011, the BSP projects remittances to grow by $20 billion, or 8 percent higher than the $18.8 billion recorded for the full-year 2010.

--
---------------------------------------------
CARLOS ANI - SEEDFINANCE Corporation - http://www.seedfinance.net
Email: carlosani@seedfinance.net
Landline: +63495010127 Cellphone: +639152919580
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com http://phildevfinance.wordpress.com
CONSULTING - http://www.carlosani.com
My Clippings - http://www.myclipps.posterous.com
------------------------------------------