Author Topic: Growth in remittances of Filipino workers overseas  (Read 434 times)

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Growth in remittances of Filipino workers overseas
« on: September 19, 2010, 11:08:18 PM »
The Bangko Sentral ng Pilipinas sees a possible eight percent growth in remittances of Filipino workers overseas this year.

Deputy BSP Governor Diwa C. Guinigundo stressed this point at the annual conference held in tandem with Philippine Statistical Association at the BSP complex along Roxas Boulevard.

At the conference, Guinigundo bared a sense of optimism that monthly remittances of more than US$ 1.6 billion would be sustainable over the foreseeable future.

“We hope we can sustain the eight percent growth in remittances given that the global economy is showing some recovery, even if very fragile,” he told reporters.

Not too long ago remittance flows posted growth rates in excess of 30 percent from month to month, which allowed this key consumption driver to post double-digit expansion averaging 13.7 percent as late as 2008.

But last year, the remittance flows grew by only 5.6 percent, which surprised analysts and experts at the International Monetary Fund, for example, who predicted the global downturn would prove too much and make the flows contract.

Guinigundo said the continued resiliency of remittances this year was owed not only to global economic recovery but also to the differentiated skills and the diverse markets open to millions of overseas Filipino workers.

Added to this was the greater remittance and data capture by banks both overseas and in the Philippines who deal with the transactions.

As a result, the full-year remittance volume this year should reflect forecast growth averaging eight percent to more or less US$ 18.735 billion.

As of July this year, remittance level already reached US$ 10.679 billion or a growth of 7.1 percent in the first seven months alone, Guinigundo said.

He also said it was not just the OFW remittances alone but all other flows that have done well during the period.

“I think the markets are convinced the macro-economy is in very good shape. Also, there is a greater degree of optimism as shown by the latest results of the consumer confidence survey, which remains negative but has showed a large rebound,” Guinigundo said.

This pertains to the diminished number of pessimists among consumers responding to the survey the BSP conducted recently in which the consumption index improved to negative 14 percent from negative 28.7 percent three months earlier.

The sharply improved consumer mood bodes well for the broad economy down the line considering it has accelerated to 7.9 percent in terms of the gross domestic product in the second quarter this year.

Consumption accounts for about 80 percent of what drives the economy forward, it was said.

Guinigundo said the foreign inflows that came as a result of improving macroeconomic conditions have not made the job of managing the economy any harder than it was before.

Except, of course, where it concerns the export sector whose members typically complain about the strength of the Philippine peso as this impact on their bottomlines, he said.

In a booming economy where foreign inflows boost the value of the local unit relative the US dollar, exporters complain of diminished competitiveness as they generate significantly fewer dollar revenues than if the peso was weaker.

So for the nth time Guinigundo said the exchange rate should not be the only yardstick against which exporter performance should be viewed because production costs and the efficient use of resources are just as critical if not more important considerations.

“One can see we're in the middle of the pack when considering the appreciation of the peso from 2001 to 2010. The peso appreciated by only 13 percent compared to the 35 percent appreciation of the Japanese yen, for example. - PNA

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