Bangko Sentral sees rise in remittances

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) expects an increase in remittances sent through formal channels to boost the country’s gross international reserves (GIR).

BSP Deputy Governor Diwa Guinigundo said that remittances sent through informal channels comprise 30 percent of the amount sent through formal channels such as banks and remittance centers.

“That’s about five years ago. Now, our estimate is only five percent,” he said.

Guinigundo explained that if the remittances are sent through informal channels, the tendency is these are already converted to pesos by the time they arrive in the country. As such, he said, dollars sent through these informal modes, do not help boost the country’s GIR.

He expressed hopes that Filipinos abroad would continue to send dollars to their families in the Philippines through banks and accredited remittance centers.

As of end-February, the country’s GIR went up slightly by 0.26 percent to $39.3 billion from $39.2 billion the previous month, latest data from the BSP showed.

The central bank said in a statement that the country’s dollar supplies are enough to cover 5.9 months of imports of goods and payments of services and income.

Monetary authorities attributed the slight increase in the GIR to the National Government’s deposits of loan proceeds from the World Bank and the Asian Development Bank. The BSP said higher prices of its gold holdings also beefed up the increase in the GIR.

Dollar remittances from OFWs, meanwhile,went down to $1.27 billion in January from $1.26 billion in the same period last year. However, the 0.1 percent year-on-year growth was slower than the 15 percent posted in 2007 from the $1.1 billion recorded in 2006.

Major sources of remittances in January were the US, Saudi Arabia, Canada, Singapore, Japan, UK, Italy, and United Arab Emirates.–Iris C. Gonzales, Philippine Star