FOLLOWING a slump in January, growth in cash remittances from overseas Filipino workers (OFWs) likely bounced back in February although not as fast as from a year ago, a Singapore-based bank said.
Singaporean bank DBS said the market consensus is for a rebound in OFW cash remittances in February after the slowest growth in six years was recorded in January.
The central bank is expected to release the official February OFW cash remittances this week.
“OFW remittances growth came in a poor 0.55 percent for January, the worst print since early-2009, and triggered concerns that flows are drying up,” DBS said.
DBS forecasts cash remittances to rise by about 5 percent in February after a nearly flat performance in January, when money sent home by overseas Filipinos amounted to $1.82 billion, up just 0.5 percent from a year earlier.
“Expect OFW remittances growth to return to about 5 percent in February, easing concerns stemming from the January data. And in fact, the seasonally-adjusted data for January still indicates OFW remittances are trending circa $2.1 billion per month,” it said.
“At this juncture, remittances are still good enough to mean an even higher total for 2015, after a record high $24 billion last year,” it added.
However, compared to the growth pace a year earlier, the bank’s forecast falls below the 5.9 percent growth recorded in February 2014 when cash remittances reached $1.80 billion.
DBS cited the importance to the economy of strong growth in foreign remittances.
“It provides underlying support to private consumption, the resilience of which has kept GDP growth potential in the 6 percent to 6.5 percent range this year. At the same time, strong remittances have also anchored the overall balance of payments, limiting any external financing concerns,” it concluded.