MANILA, Philippines - Remittances grew at a much faster pace in July, defying earlier projections that the global economic crunch would dampen the ability of overseas Filipino workers to send money to their families in the Philippines.

According to a report by the Bangko Sentral ng Pilipinas, remittances rose 9 percent to $1.49 billion in July, bringing the total for the first seven months of the year to $9.97 billion, up 3.8 percent from a year ago.

The growth since January contradicted forecasts by investment banks that remittances would contract sharply this year on the back of layoffs in the manufacturing and financial sectors abroad. The latest remittance growth rate also exceeded the government?s own projection of a flat growth for the year.

?Given sustained remittance flows at the onset of the second half of the year and continuing signs of improving global economic conditions, remittances are anticipated to remain stable for the remainder of 2009 and will continue to be a major growth driver of the economy,? BSP Governor Amando M. Tetangco Jr. said.

He said the BSP was already updating the government?s remittance forecast for 2009 and would soon review the projection to a much favorable growth figure.

The amount of remittances sent to the country is a closely watched economic indicator as the money fuels consumption. About 10 percent of Filipino households are financially dependent on funds sent by family members working abroad.

Citing reports from the Philippine Overseas Employment Administration (POEA), Tetangco said remittances were still growing despite the economic turmoil worldwide because of rising demand for Filipino laborers in countries less affected by the crisis.

Filipinos overseas who were laid off in recession-hit countries were outnumbered by the newly hired in alternative labor markets.

Government officials and economists said Filipinos were favored by foreign employers because of their proficiency in English and high level of skills.

The BSP said that for the first seven months of the year, remittances came mostly from the United States, Canada, Saudi Arabia, the United Kingdom, Japan, Singapore, the United Arab Emirates, Italy and Germany.

Tetangco said remittances would continue to be buoyed in the coming months by the sustained rise in deployment of Filipinos abroad.

He said the Philippine government has signed tie-ups with several countries in need of manpower resources. These included Qatar, Saudi Arabia, Canada, Australia, Japan, South Korea and Taiwan.

?Apart from these recruitment prospects, the Philippine government has started crafting guidelines on the deployment of overseas Filipino workers to provide the manpower requirements for the massive military base expansion in Guam starting next year, Tetangco said.