Cut in remittance goal seen

THE Philippine central bank said it would review this year’s forecast for remittances sometime in the latter part of the third quarter given indications that money sent home by overseas Filipino workers (OFW) may have peaked. “We are sticking to that forecast for now. Later this year we are going to review the forecast, maybe in the latter part of the third quarter and we will have to see whether that 8 percent is still doable. So far the growth is 6 percent,” Bangko Sentral ng Pili-pinas Governor Amando Tetang-co told reporters.

“I think a lot of this would depend on the continued deployment of Filipino workers, but certain things are working for us like we are deploying more professionals and skilled workers. There has also been a diversification of countries where we are sending our workers. So, all of these factors point to an upward direction for OFW remittances. But, as I said, we will have to review [the remittance forecast] given what has happened so far this year,” Tetangco said.

The central bank chief said the Philippine economy should not depend exclusively on OFW remittances. But the best policy option is “precisely to maximize whatever we can in terms of our overseas workers providing remittances from abroad,” he said.

The central bank had warned that remittances have peaked and may soon plateau since the inflows have breached a very large base, leading to a situation wherein growth was stabilizing at the mid-single digits of between 5 percent and 6 percent.

For this year, the BSP had raised its remittance forecast from six percent to 8 percent.

Tetangco said remittances have increased rather than decline last year, bucking forecasts made by many analysts.

Remittances grew 5.4 percent to $1.5 billion in April from last year’s $1.44 billion, bringing this year’s four-month tally to $5.9 billion.

Banco De Oro Unibank (BDO) said remittance growth may slow, “but [there would be] no contraction.”

For 2010, the bank forecast remittances to reach P18.249 billion.

During the 2010 Stake-holders’ Award held on July 7, the BSP recognized BDO as the top bank in the remittance business, after cornering 26 percent of the total amount of money sent home by OFWs.

The Bank of the Philippine Islands ranked second with a 24-percent share, and was followed by Philippine National Bank, 15 percent; Metropolitan Bank and Trust Co., 14 percent; and Rizal Commercial Banking Corporation, 7 percent. –Lailany P. Gomez Reporter, Manila Times