World Bank projects growth in remittances to PH slowing to 2.8%
The Philippines is expected to remain among the biggest destinations of remittance flows this year even as the World Bank projected slower growth due to the repatriation of overseas Filipino workers (OFWs) from the Middle East.
In its December 2018 Migration and Remittances: Recent Developments and Outlook report, the Washington-based multilateral lender said the top remittance-receiving countries would be India ($79.5 billion), China ($67.4 billion), the Philippines and Mexico (both $33.7 billion), Egypt ($25.7 billion), and Nigeria ($25.1 billion).
Also among the 10 countries seen receiving the largest remittance flows in 2018 were Pakistan ($20.9 billion), Ukraine ($16.5 billion), Bangladesh and Vietnam ($15.9 billion each).
“Remittances to the Philippines are expected to grow at an annual rate of 2.8 percent in 2018, to reach $33.7 billion, lower than the growth rate of 5.4 percent witnessed in 2017. Lower growth is due to the substantial decline in private transfers from the Middle East, which fell by 17.3 percent in the first nine months of 2018 relative to the same period in 2017,” the World Bank said.
“Flows from the Middle East constituted nearly 28 percent of total remittances in 2017. The drop can be partly attributed to the repatriation of overstaying Filipino workers under an amnesty program in the Gulf Cooperation Council,” it explained.
The World Bank noted that in the case of neighboring Indonesia, remittances from the Middle East jumped by 36 percent in the first half of this year.
The still strong cash transfers to the Philippines were partly attributed by the World Bank to remittance fees, which were among the lowest in the East Asia and Pacific region.
During the third quarter of 2018, sending money from Kuwait, Singapore, the United Arab Emirates and Malaysia to the Philippines were among the five lowest cost corridors, on top of a decline in rates compared with a year ago, the World Bank noted.
Remittances were the country’s biggest source of foreign exchange income, insulating the local economy from external shocks by ensuring the steady supply of dollars into the system.
These cash transfers were also a major driver for domestic consumption, hence contributing to robust economic growth.
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