AFP FILE PHOTO
MANILA, Philippines–Cash transfers from migrants may be constrained this year as parts of the world where many overseas Filipino workers (OFW) reside face economic headwinds.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said remittance growth in February recovered. The preceding month, growth in money sent home by OFWs grew by just 0.5 percent.
The central bank said efforts by banks to expand their overseas reach through new offices or partnerships with other institutions also continued to make it easier for overseas workers to send home money.
“The steady deployment of OFWs remained the key driver in the sustained inflows of remittances,” the BSP said Wednesday.
In February, remittances rose by 4.2 percent to $1.88 billion. For the first two months of the year, remittances were up by 2.4 percent.
Main sources of money were the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, Hong Kong and Canada. Citing data from the Philippine Overseas Employment Agency (POEA), the BSP said that, from January to February, job orders for Filipinos reached 164,525.
Apart from being the country’s major source of foreign exchange income, remittances from overseas Filipino workers accounted for at least 8.5 percent of domestic output in 2014. Officials expect remittances to grow by 5 percent this year.
In a note to clients this week, Standard Chartered bank doubted whether the strength of remittances would hold up in the coming months, given the weaknesses in parts of the world.
“Remittances from Asia have contracted for three consecutive months, reflecting consolidating growth momentum in the region,” the bank said.
Growth in remittances from Europe declined for eight consecutive months, it said, adding that transfers from the Middle East could also ease if low oil prices were to impact employment prospects and wage growth for overseas workers.
A significant portion of the Philippines’ eight to ten million migrants work in the Middle East, a region that relies heavily on revenues from oil.