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BPO, Remittances to Remain Key PH Economic Drivers

by: Sarah Joson

Tuesday, February 25, 2014 | Outsourcing News |

PH's Gross International Reserves Backed by Remittances and BPOs

Citi, a renowned global financial institution, anticipates that the drop in the Philippines’ foreign exchange reserves last January will be restored by the bullish business process outsourcing (BPO) sector and remittances from overseas Filipino workers.  

According to Jun Trinidad, an economist at Citi, the continuous growth of the IT-BPO sector and remittances will carry on in supporting the gross international reserves (GIR) of the country. However, he said outflows for unwinding portfolio positions, external debt repayments, among other things remain a challenge.

The economist cited the sharp drop of the Philippines’ GIR from the $83.187 billion recorded in December, to $78.939 billion last month.
He further explained that last year, GIR stock decreased by $644 million even as revenues from BPO operations and remittances were strong. Last January, it fell by $4.2 billion - the largest decline in a month’s time.

Data from Central Bank showed that 2013 experienced the highest annual record for remittances with $22.76 billion, a 6.4 percent jump from the $21.391 billion posted in 2012.

On the other hand, IT-BPO revenues grew by 17 percent to $15.5 billion in 2013, which is a sign that they’re on target in achieving the $20 billion goal by 2016.


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