The International Monetary Fund sees remittances from Filipinos working abroad falling 7.5 percent amid a contracting global economy.
The IMF earlier lowered its growth forecast for the Philippines to zero, reflecting the prospects of a significant contraction in exports and imports and a weakened outlook for remittances.
The IMF said private consumption would remain robust even if remittances declined as lower inflation and commodity prices offset the negative impact of lower investments and exports.
“It should be noted that the outlook for remittances is subject to considerable uncertainty and we note that, although slowing, remittances growth continues to be positive in the early part of the year,” the IMF said in a statement.
“The projected recession in many of the host countries, lower commodity prices, and recent trends in remittances and deployment figures underpin our projection for a decline in total remittances this year, before recovering in 2010. Nevertheless, it cannot be excluded that overseas Filipino workers rise to the occasion once again and that remittances will be able to withstand these global economic forces,” the IMF added.
The IMF said some factors specific to the Philippines provided an upside risk to growth, mainly from the fiscal stimulus and the recent rise in the deployment of Filipino workers.
“The Philippines’ economy continues to perform better than its peers. The Philippines remains among the few countries in Asia that will avoid negative growth in 2009, with most economies suffering deep recessions. Nevertheless, the growth outlook has become more challenging. Growth is now projected to be flat in 2009, followed by a modest recovery to 1.0 percent in 2010,” the IMF said. –Eileen A. Mencias, Manila Standard Today