REMITTANCES from Filipinos overseas continued to expand in March as the gradual recovery of the global economy fueled an increase in the demand for labor, the Bangko Sentral ng Pilipinas reported Monday.

The BSP said money remitted by migrant Filipinos reached $1.6 billion in March, up 5.6 percent from $1.47 billion in the same month last year.

This brought total remittances in the first quarter to $4.34 billion, up 7 percent from $4.06 billion in the same period last year.

?The 7-percent year-on-year growth registered during the three-month period was supported by higher remittances from both sea-based and land-based workers,? BSP Governor Amando Tetangco Jr. said.

He added that the increase in remittances was expected to be sustained due to the consensus that the worst of the global crisis was over and that the world economy would grow this year after last year?s recession.

?The steady remittance flows continued to be propelled mainly by sustained strong demand for Filipino skills and expertise as well as the expanded access to enhanced banking services by overseas Filipinos and their beneficiaries,? Tetangco said.

Since banks and remittances companies have branched out to more countries with many migrant Filipinos, Tetangco said the latter were encouraged to send money to their families more frequently.

He added that the rise in the number of remittance centers abroad discouraged migrant Filipinos from sending money through informal channels like illegal money transfer agents and co-workers about to return to the Philippines.

The central bank earlier set its remittance growth forecast for the full year at 6 percent from last year?s $17.3 billion. However, Tetangco said the monetary agency raised its forecast to 8 percent given expectations of a further increase in the demand for Filipino labor as the recovery of the global economy became firmer.

Remittances last year were up 5.6 percent from $16.4 billion in 2008. The growth in 2009 defied projections that money sent by Filipinos overseas would shrink substantially due to the global crisis, which dragged the economies of rich countries into a recession.

While remittances to other developing countries indeed contracted, those sent to the Philippines continued to grow.

An explanation given by economists was that many overseas Filipino workers were in industries hardly affected by the global crisis such as education and healthcare.

Government officials also credited the move of the Philippine Overseas Employment Administration (POEA) to forge employment agreements with its counterparts in countries less affected by the crisis.