Remittances by overseas Filipino workers (OFW) will rise a further 6 to 7 percent this year and provide a major growth engine for the local economy against global headwinds, the research arm of Metropolitan Bank and Trust Co. said.
A steady inflow of such remittances is seen coming from the United States, where economic growth is expected to gain pace and make up for the slowdown in other developed economies which also employ Filipino workers, Metrobank Research said in its latest report.
In its projection, the group said OFW cash remittances, or funds coursed through banks, may climb by a faster 6 percent to 7 percent in 2015 from 5.8 percent in 2014.
“The improving US economic performance will provide support for stable inflows despite weakness in other advanced economies. Expect consumption to remain steady given sustained remittances and manageable inflation,” Mabellene Reynaldo, research analyst at Metrobank Research, said.
The Bangko Sentral ng Pilipinas has reported that cash remittances, which are a component of personal remittances, in full-year 2014 rose 5.8 percent to $24.31 billion from $22.97 billion in 2013.
The US was among the major sources of cash remittances by Filipinos last year, along with Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Canada, Japan and Hong Kong.
Personal remittances reached an all-time high of $26.93 billion last year, exceeding the central bank’s growth target of 5 percent for the year with a 6.2 percent increase. It also broke the previous record of $25.35 billion posted in 2013.
Personal remittances consist of the net compensation for OFWs, personal transfers such as current transfers in cash or in kind, as well as other household-to-household transfers between Filipinos abroad and capital transfers between households.