MANILA, Philippines — The World Bank expects remittances to the Philippines to hit $23 billion in 2011 on the account of rising demand for Filipino workers despite the unfavorable global economic climate.
The bank’s forecast is higher than the government’s own estimate of $20.1 billion, which represents a 7-percent growth from $18.8 billion in 2010.
With the bank’s projection, it said the Philippines would likely remain as the fourth-largest remittance recipient country following India (seen to get $58 billion), China ($57 billion), and Mexico ($24 billion).
For all developing countries, remittances are expected to hit a total amount of $351 billion, which represents an 8-percent increase from last year’s $323 billion.
This year is thus expected to be the first year when total remittances to developing countries are seen to grow since the global financial and economic crisis that began in 2008. The Philippines has been an exception throughout the past year as it continued to experience rising remittances even at the height of the global turmoil in 2009.
“Despite the global economic crisis that has impacted private capital flows, remittance flows to developing countries have remained resilient,” Han Timmer, World Bank director for development prospects group, said in a statement.
The World Bank also said that remittances to developing countries would continue growing through 2014 amid prospects of modest growth for the global economy.
Remittances are a closely watched economic indicator. In the case of the Philippines, remittances from the more or less 10 million overseas Filipino workers are deemed vital because these significantly help fuel consumption of Filipino households that in turn is a key growth driver for the domestic economy.
Government officials credit the rising demand for Filipino workers, some of the preferred migrant workers by foreign employers, and efforts of the government to seek for alternative labor markets for the sustained rise in remittances.
Officials said the government has inked labor agreements with various countries, such as those from the Middle East, to have markets for more Filipinos who want to work offshore.
In the first three quarters of the year, the Philippine economy managed to grow by 3.6 percent. Economists credited the growth partly to steady consumption of individuals that is aided by remittances.
They said private consumption was a saving grace, given that government expenditure and income of the export sector were anemic.
Export earnings have been on a decline the past months because of the weak global economy that is dampening demand for goods. The unfavorable global economic picture is driven by the economic woes of the United States and as well as the debt crisis in the Euro zone.