Growth in remittances slowing down — BSP data

Growth in remittances from Filipinos abroad is plateauing based on recent Bangko Sentral ng Pilipinas (BSP) data that showed foreign transfers totaling $1.6 billion in March or 1 4.1 percent growth from the previous month.

In February, the growth in remittances was at a higher 6.2 percent but was already a deceleration from the previous month.

“Remittances growth at 4.1 percent in March compared to 6.2 percent in February marked the fourth straight month of deceleration,” HSBC economist Sherman Chan said.

Total remittances in the first-quarter was recorded at $4.59 billion, representing a 5.9 percent growth from a year ago but was down two percent from the previous quarter.

“With yet another month of notable deceleration in remittance growth, it has become increasingly difficult to refute the fact that growth of money inflows from OFWs (overseas Filipino workers) is losing steam,” Chan said.

BSP Gov. Amando Tetangco Jr. said the first-quarter remittance figure was the result of higher cash transfers from both sea- and land-based OFWs.

Remittances from sea-based workers grew a healthy 12.1 percent against a 4.3 percent growth in transfers from land-based workers.

Some 80 percent of the remittances originated from the United States, Canada, Saudi Arabia, the United Kingdom, Japan, Singapore, the United Arab Emirates and Italy.

Tetangco said the social unrest in some parts of the Middle East and North Africa or the so-called MENA countries and the string of disasters in Japan did not result in a major damage on remittance flows as some have feared.

“Total remittances from Japan continued to grow by 5.3 percent to $219 million as more overseas Filipino workers based in Japan reside in cities outside the areas affected by the calamities,” he said.

He acknowledged, however, this was a slowdown from the 12.2 percent Japan-originated remittance growth from a year earlier.

Filipino workers based in Bahrain, Yemen, Syria and Libya sent home $40.1 million or 4.5 percent higher than a year ago and compared favorably against the 0.7 percent growth registered in the first quarter last year.

Chan, meanwhile, said HSBC expects a rebound in remittance growth during the second half of the year “given solid demand within Asia and the continued global recovery of Western economies.”

Chan also said the post-quake reconstruction in Japan and the recent fiscal package presented by the Saudi Arabia government “will translate into a rise in demand for OFWs.”

“That said, the weakness in first-quarter result means that annual remittances growth is set to come in below our initial forecast of 8.5 percent, to likely settle around 7.5 percent,” she said.

The BSP earlier had said OFW remittances this year should grow by around seven percent or $20.076 billion from only $18.763 billion. CL, Daily Tribune