Dollar remittances expected to increase
Metrobank expects remittances from overseas-based Filipinos to grow by at least 6 percent this year and sustain robust household consumption in the country.
Marc Bautista, the bank’s head for research, said last year’s growth in remittances is likely to be sustained on the back of strong global demand for Filipino labor.
“We expect remittances to remain significant and sustain last year’s growth,” Bautista told reporters. With a 6-percent growth, remittances this year would reach over $22 billion.
The bank’s projection is the same as that of the Bangko Sentral ng Pilipinas, which earlier said demand from alternative labor markets—such as the Middle East—is fueling growth in total remittances. Because of increasing employment opportunities in the alternative markets, the BSP said, the continuing weakness of the economies of the United States and Europe has so far failed to erode the amount of money sent home by Filipino migrants.
In 2012, remittances from overseas-based Filipinos grew year on year by 6 percent to reach about $21 billion.
The Philippines is the fourth-biggest recipient of remittances next to China, India and Mexico.
Remittances have become a closely watched economic indicator for the Philippines given its ability to significantly fuel household consumption and boost the country’s total reserves of foreign-exchange.
The country’s gross international reserves now stand at about $84 billion, which is enough to cover about one year’s worth of the country’s import requirements. Based on international benchmarks, comfortable foreign exchange reserve levels are those enough to cover at least four months’ worth of imports.
Money sent home by migrants also is credited for boosting the value of the peso against the US dollar.