by: Sarah Joson
Tuesday, December 1, 2015 |
Christian De Guzman, senior analyst and Vice-president at Moody’s Sovereign Risk Group, said remittances from Filipinos working abroad, a foundation of domestic consumption in the Philippines, are projected to lose traction this year. However, the analyst pointed out that it should not cause concern because inflows are relatively large and continuous, and are widely supported by earnings from the business process outsourcing (BPO) sector.
He said the growth of BPO revenues should not be considered as a problem since it indicates a healthy economy, and enables access to more opportunities. Moreover, he said remittances and BPO receipts are two major gears for growth that take turns in gaining strength. He also noted that though remittances are weaker, the total value is still strong.
Cash remittances from OFWs have been tallied, and as of September, these already amounted to $18.408 billion which is 4.1% more than the $17.682 billion recorded last year over the same period.
However, remittances posted the highest ever last year with $24.348 billion, which is up by 5.8% annually. It even surpassed the 5.5% target set by Bangko Sentral ng Pilipinas (BSP) in November of last year. Cash remittances accounted for 8.5% of gross domestic product of the country last year.
On the other hand, a research note indicated that economists at the Hong Kong and Shanghai Banking Corp. Ltd. believe that growth in cash remittances will continue as the demand for OFWs peaked last year.
De Guzman pointed out that there’s no indication in the data that remittances will decline. It just so happens that BPO receipts are bullish to the point that they are expected to outpace remittances. BPO receipts also point out that job opportunities in the Philippines are stronger.
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