Remittances seen staying strong
MANILA, Philippines—HSBC expects remittances to the Philippines to remain strong despite the chaos in certain Middle Eastern countries.
The bank said the tension in those countries would likely have minimal adverse impact on the remittances from Filipinos overseas.
In a research note on the Philippines, the investment bank noted that the Middle East accounts for “only” 15 percent of total remittances sent to the country. Any drop in the amount of money sent by Filipinos based in the Middle East may be offset by an increase in the amount sent by those based in other regions, it said.
HSBC cited the modestly improving economy of the United States and the robust growth posted by Asian economies.
“In light of the recent chaos in the Middle East, concerns about the Philippine remittances outlook are understandable…. However, economic developments in the West and in Asia still carry larger implications. Hence, we do not expect a slowdown in remittances from the Middle East to weigh too heavily on overall growth,” HSBC said in the paper written by its Asean economist, Sherman Chan.
Last year, remittances to the Philippines reached an all-time high of $18.8 billion, registering an 8.2-percent annual growth rate.
The spate of political protests in certain Middle Eastern countries have elicited concerns about a possible decline in remittances this year.
HSBC said it was even expecting remittances, in dollar terms, to grow further this year. It said overseas Filipino workers had a tendency to send more money to their families in times of peso appreciation to make sure the peso amount of their remittances remain the same.—Michelle V. Remo
