Remittances could be affected by escalating tensions in the Middle East but overall inflows will continue to grow as Filipinos seek work abroad, the Bangko Sentral ng Pilipinas (BSP) said.
Saudi Arabia severed diplomatic ties with Iran on Sunday after protesters ransacked its embassy in Tehran following the execution of a Shiite cleric. Iran, meanwhile, declared that Saudi Arabia would face “quick consequences” for the execution.
“As for overseas Filipino remittances, we may see some temporary setback because of logistical difficulties and deployment may slow,” central bank Governor Amando Tetangco Jr. said in a text message to reporters on Tuesday.
“But based on experiences from past regional conflicts, our overseas workers are able to find ways of sending back money to their families here and also work in other areas that may be safer from conflict,” Tetangco added.
Two Middle East countries— Saudi Arabia and the United Arab Emirates (UAE)—were among the major sources of cash remittances in the first 10 months of 2015 based on latest central bank data.
Funds coursed through banks for the January to October period grew by 3.7 percent to $20.64 billion, mainly coming from Saudi Arabia, the UAE as well as the United States, Singapore, the United Kingdom, Japan, Canada and Hong Kong.
Middle East countries were also among the primary destinations of OFWs based on data from the Philippine Overseas Employment Administration (POEA).
The POEA said 717,182 job orders were approved during the period. Of these, 44.1 percent were for service, production, and professional, technical and related positions in Saudi Arabia, Kuwait, Qatar, Taiwan, and Hong Kong.
The BSP has trimmed its cash remittances outlook for 2015 to 4 percent from 5 percent. In value terms, cash remittances are projected to have reached $25.3 billion last year from $24.3 billion in 2014.