by: Karen Cayamanda
Wednesday, February 17, 2016 |
There may be weak global trade and a predicted slowdown in remittances from Filipinos working abroad, but revenues from the ever growing business process outsourcing (BPO) sector are seen to keep the Philippines' current account in surplus.
Jose Mario Cuyegkeng, economist at ING Bank, said flat growth is seen in remittances in 2015, posting a total of $22.83 billion in the first 11 months of last year. According to data from the Bangko Sentral ng Pilipinas (BSP), this was higher by only 3.6 percent compared to 2014 remittances which posted 5.9 percent growth reaching $24.438 billion. This accounted for 8.5 percent of the country's gross domestic product.
Meanwhile, economists from ANZ Research had also seen a slowdown in remittances, forecasting a .7 percent contraction in December as Philippine peso weakens against the US dollar. This makes the year's growth rate to only 3.2 percent.
On the other hand, BPO revenues are predicted to post strong growth this year at 15-16 percent, keeping the overall structural inflows growing. Information Technology and Business Process Association of the Philippines Chairman Danilo Sebastian Reyes said the sector was seen to post 16 percent growth in 2014, with revenues reaching $18.1-18.4 billion. The robust growth of the sector would also enable the country to post a positive position when it comes to external payments, even with the current slowdown in external demand and global growth potential.
In the next few years, BPO revenues are expected to surpass remittances, according to economists.
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