Banks expect remittances to grow by 5-6% this year

MANILA, Philippines—The banking industry expects the remittance businesses of its members to grow further this year, albeit at a slower pace.

The Bankers Association of the Philippines (BAP), the organization of universal and commercial banks in the country, expects the amount of remittances coursed through banks to grow by between 5 and 6 percent this year. This is slower than the 8.2-percent increase posted last year.

Remittances coursed through banks hit $18.8 billion in 2010.

BAP president Aurelio Montinola III announced his group’s projection at the sidelines of a banking forum organized by the Rural Bankers Association of the Philippines and held in Pasay City.

The projection takes into account reports about the deployment of more Filipino workers overseas. The rising investments in various parts of the globe force foreign employers to hire more workers.

Government data showed that in the first four months of the year, job orders for Filipino workers from employers overseas totaled 203,748. Of the number, about 30 percent has already been processed by the Philippine Overseas Employment Administration (POEA).

The job orders are varied, covering services, production, professional and technical-related jobs. The requirements were mostly from employers based in Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Taiwan and Hong Kong.

The projection also takes into account the moderating effects of the recent disaster in Japan and the ongoing political unrest in the Middle East.

Both events were said to have led to job losses for some overseas Filipino workers.

BAP’s projection is about the same as that of the Bangko Sentral ng Pilipinas.

The BSP expects remittances sent through banks to grow by 6 percent this year, citing continued demand by foreign employers for Filipino workers.

The facilitation of remittances is one of the profitable activities of banks in the country, as the rising number of Filipino migrants has led to increase in demand for remittance services.

The BSP said that about 95 percent of the remittances sent by Filipinos based offshore were coursed through formal channels, such as banks and legitimate remittance companies like Western Union.

More than five years ago, the BSP was faced with the regulatory problem of having a significant amount of remittance being sent through informal channels.