BY LAILANY P. GOMEZ Reporter

MONEY sent home by Filipinos working abroad grew faster than expected in the first month of this year, according to the Philippine central bank.

In a statement, the Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said remittances from overseas Filipino workers (OFW) amounted to $1.4 billion in January, growing 8.5 percent from a year ago.

Remittances from sea-based workers pulled up the average, having grown by 18.1 percent, while money sent home by land-based workers inched up a slower 6.3 percent.

The bulk of inflows came from the US, Canada, Saudi Arabia, Japan, Singapore, the United Kingdom, Italy and United Arab Emirates.

Remittances from these countries accounted for 81.1 percent of the total inflows reported by local banks. Remittances from the US grew by 5.1 percent after consecutive declines since January 2009.

The Department of Labor and Employment anticipates that work prospects for OFW will remain favorable, given the expected opening of new job markets and more opportunities for better-paying work in the next five to ten years. In addition, the Philippine Overseas Employment Administration reported that nearly 19 percent, or 18,539 of the total approved job orders of 98,845 for the period January 1 to February 28 had been processed.

Processed job orders were particularly strong for the manpower requirements of Saudi Arabia, UAE, Taiwan and Qatar for service, production, and professional, technical and related occupations.

The BSP forecast 6-percent growth in 2010.

The resilience of remittances has allowed the Philippines to enjoy a $5.295-billion balance of payments (BOP) surplus last year, or higher than the central bank’s forecast of $4.9 billion.

A summary of the Philippines’ economic transactions with the rest of the world, the BOP includes the country’s external trade in goods and services, net capital flows and other income transfers.

Ample dollar inflows enabled the BSP to keep its key interest rates at record lows of four and six percent for the overnight borrowing and lending windows.

London-based think tank Capital Economics said it expects the BSP to start hiking its policy rates in early June, once the May national elections are out of the way.

“The upshot is that we expect a first 25 basis points hike in the overnight rate at the BSP meeting in early June. This seems more likely to us than a rate increase at the next [late April] monetary policy review, which is probably too close to the May elections. We continue to anticipate that policy rates will reach 5 percent by end-2010,” Ashira Perera, economist at Capital Economics, said.

The BSP last week tightened its rediscounting facility in a move seen as a prelude to an increase in its key interest rates.

“Politics complicates when the key overnight rate is moved up from 4 percent,” Perera said.

“While food and wage pressures will probably intensify near term and will likely lift inflation to the top end of the target range, we agree with the government and believe that there is a good chance that consumer price gains will not breach the target in 2010-11 as a whole,” he said.

The BSP forecasts inflation to average at 4.6 percent this year, or within its target range of 3.5 percent to 5.5 percent.