The World Bank sees remittance flows to the Philippines hitting nearly $33 billion this year amid global economic recovery.
“Remittances to the Philippines continue to remain resilient despite the political uncertainties in the Middle East, and are expected to grow by 5.3 percent in 2017, slightly higher than the estimated 4.5-percent increase in 2016,” the Washington-based multilateral lender said in its Migration and Development Brief report released on Oct. 3.
The Philippines was poised to be the third-biggest remittance-receiving country this year with $32.8 billion, after India’s $65.4 billion and China’s $62.9 billion, the World Bank’s latest estimates showed.
Worldwide, “remittances to low- and middle-income countries are on course to recover in 2017 after two consecutive years of decline,” the World Bank said in a statement.
“Officially recorded remittances to developing countries are expected to grow by 4.8 percent to $450 billion for 2017. Global remittances, which include flows to high-income countries, are projected to grow by 3.9 percent to $596 billion,” the World Bank added.
According to the World Bank, “the recovery in remittance flows is driven by relatively stronger growth in the European Union, Russian Federation, and the United States.”
However, remittances to East and South Asia may be dampened by “fiscal tightening, due to low oil prices, and policies discouraging recruitment of foreign workers” in oil-producing Gulf Cooperation Council countries, according to the World Bank.
Steady demand for overseas Filipino workers sustained cash remittances to grow 5 percent year-on-year to $16.1 billion as of end-July, the latest Bangko Sentral ng Pilipinas data showed.
Cash remittances were projected by the BSP to hit a record $28 billion by yearend.
The BSP had kept the 4-percent remittances growth target for 2017, although the value of the updated projection was higher than the earlier forecast of $27.7 billion.
Last year, cash sent home by overseas Filipinos through banks reached a record-high $26.9 billion, 5-percent higher than 2015’s $25.6 billion.
Remittances are the country’s largest source of foreign exchange income, insulating the domestic economy from external shocks by ensuring the steady supply of dollars into the system.
Also, these cash transfers are a major driver for domestic consumption, hence contributing to strong economic growth. /je