No sign of slowing yet from Mideast – analyst
Remittances from overseas Filipino workers bounced back in February from a slowdown a month earlier, posting the highest rate of growth in eight months, data from the Bangko Sentral ng Pilipinas (BSP) showed on Friday.
An economist said the data has not shown any indication of a slowdown as projected earlier for remittances from the Middle East as a result of falling oil prices.
Personal remittances—representing overseas Filipinos’ earnings, personal transfers in cash or in kind, and capital transfers between households—grew by 9 percent to $2.334 billion from $2.142 billion a year earlier.
Personal remittances also expanded from $2.235 billion posted in January. February’s growth rate was the highest in eight months since June 2015’s 10.5 percent.
Cash remittances—money sent through banks—also grew 9.1 percent in February to $2.110 billion from $1.935 billion in February 2015.
Month-on-month, funds coursed through banks also posted a rise from $2.022 billion in January.
No sign of slowdown
“Although there have been expectations for a slow-down in remittances from the Middle East due to lower oil prices, we have not yet seen proof of this in the data,” HSBC economist Joseph Incalcantera said.
For instance, Incalcantera explained that based on January data, remittances from the Middle East have grown an average of 25 percent year-on-year over the past three months and now account for roughly 24 percent of total remittances on a 12-month rolling basis.
“This corroborates the data from the Department of Labor and Employment, which suggests that there have not been significant layoffs of OFWs from the Middle East–to the contrary, we continue to see job openings,” he said.
“While employment growth from Saudi Arabia is likely slowing and we may see some weakness in the data, OFW employment growth from other countries seems to remain quite strong,” he pointed out.
Year to date, personal remittances were up 6.1 percent to $4.568 billion, the central bank reported. The growth was faster than the 3.2 percent recorded in January.
Funds coursed through banks for the January to February period also saw growth accelerating to 6.2 percent, from 3.4 percent, to $4.133 billion.
The United States, Saudi Arabia, the United Arab Emirates, Singapore, Hong Kong, the United Kingdom, Canada, Japan and Qatar were again the major sources of cash remittances.
“The steady deployment of overseas Filipino workers remained a key driver to the growth of remittance inflows,” the central bank said in a statement.
The central bank cited preliminary data from the Philippine Overseas Employment Administration showing that 160,227 job orders had been approved in January to February 2016.
Of these, 31.6 percent were intended for service, production, and professional, technical and related positions in Saudi Arabia, Kuwait, Qatar, Taiwan, and the United Arab Emirates.
In 2015, remittances rose to a record high of $28.483 billion. This year, the central bank is projecting 4.0 percent growth in remittances.