Growth in remittances may slow down this year

Remittances may still grow by more than 5 percent in the second half from a year ago despite challenges in the labor markets offshore.

This was according to the latest issue of the Market Call, the joint monthly publication of First Metro Investments Corp. (FMIC) and University of Asia and the Pacific, which cited strong demand for Filipino services in diverse labor markets.

“Even with the crisis in the Middle East and North African (Mena) regions and the repatriations of many OFWs [overseas Filipino workers], it did not take long for them to find new employment abroad given the continuous demand for Filipino services,” the Market Call said.

Earlier this year, the onset of political uprisings in the Mena region and the natural disaster in Japan have elicited concerns that remittances might drop. The fear has so far not materialized as more Filipinos continue to be deployed abroad, offsetting the job losses caused by the problems in Mena and Japan.

Data from the central bank showed that remittances reached $6.2 billion in the first four months of the year, rising by 6 percent from $5.9 billion in the same period a year ago.

Last year, remittances posted an 8-percent growth to $18.8 billion.

Remittances are seen to continue to grow but at a slower pace because of the challenges in the economic environments abroad.

Earlier this year, the Bangko Sentral ng Pilipinas projected a 7-percent growth in remittances to at least $20 billion.

However, some economists said the target might be difficult to achieve following recent developments in Saudi Arabia, one of the major labor markets for OFWs.

Reports said the Saudi government would stop issuing work visas for Filipino domestic helpers. This announcement came after the Philippine government demanded higher pay for Filipino domestic helpers.