The Bangko Sentral ng Pilipinas (BSP) is seeing robust inflow of cash remittances sent by overseas Filipino workers (OFWs) to the Philippines this year until 2014.
In a briefing, BSP Governor Amando Tetangco Jr. said that cash remittances coursed through banks could reach P22.5 billion or an annual growth of 5 percent this year.
For next year, Tetangco said that cash remittances may reach P23.6 billion, growing by 5 percent.
From January to October, cash remittances reached $18.5 billion, posting a growth of 6 percent, higher than the level registered in the same period in 2012.
In October alone, cash remittances “grew robustly” by 7 percent year-on-year to reach a record-high level of $2.1 billion.
Meanwhile, for the first 10 months of the year, personal remittances of OFWs reached $20.5 billion, posting a growth of 6.8 percent from a year-ago level.
The BSP is also expecting that remittances will continue to be strong, adding that remittances will be higher in the last two months of 2013.
BSP Deputy Governor Diwa Guinigundo said that the higher remittances can be attributed to the fact that the last two months of the year is part of the Holiday season.
He added that remittances would also be higher on the account of series of natural calamities such as earthquake and typhoons, which will prompt overseas Filipino workers to send more money to their families that were affected by the calamities.
“We expect that remittances continue to be strong and supportive of BOP [balance of payments],” the BSP official noted.
Remittances sent by Filipino abroad is one of the components of the BOP, which summarizes the country’s economic transactions with the rest of the world during a period.
BOP consists of the current account, the capital account, and the financial account. A surplus arises when inflows are greater than outflows, while a deficit is incurred when outflows of dollars exceed the inflows.
From January to November, the country’s BOP surplus amounted to about $4.67 billion.
The central bank is targeting the BOP to reach $5.3 billion or 1.9 percent of the country’s gross domestic product (GDP) this year.
Next year, the BSP is seeing that the BOP will remain in surplus at $3 billion, or 0.9 percent of the GDP.