OFW remittances up 7.8% to $2.5B

Strong domestic spending is seen to continue in the Philippines as remittance inflows remain robust, an economist of ING Bank Manila said.

Data released by the Bangko Sentral ng Pilipinas Monday showed that cash remittances reached USD2.499 billion last August, 7.8 percent higher than year-ago’s USD2.319 billion and the USD2.283 billion last July.

ING Bank Manila senior economist Joey Cuyegkeng, in a research note, said the faster growth of remittances from month-ago’s 7.1 percent expansion is an “upside surprise” since it made the margin between remittances and trade deficit “practically disappeared.”

Exports grew by 9.4 percent last August although imports posted a rebound and increased by 10.5 percent.

“The increase also supports higher domestic spending which in turn means firm imports ahead,” Cuyegkeng said, referring to growth of remittances.

Remittances has been among the major growth drivers of the Philippine economy for some decades now as is accounts for around 10 percent of gross domestic product (GDP).

In 2016, cash inflows from Filipino workers overseas grew by five percent, higher than the central bank’s four percent target.

This year, the BSP’s remittance growth assumption is still four percent.

As of end-August this year, remittances rose by 5.4 percent to USD18.595 billion. Including in-kind remittances, total remittances posted an uptick of 6.4 percent to USD20.723 billion.(PNA)