OF remittances will not contract, Tetangco says

DESPITE the ongoing uncertainties in the host countries of the millions of overseas Filipinos, the Bangko Sentral is confident that the level of remittances will still grow this year, albeit slower than last year.

“I don’t believe it will contract,” BSP Governor Amando Tetangco said at the sidelines of the establishment of the Remittance Development Council (ReDC).

Remittances coursed through banks remained resilient, rising at an annual rate of 5.4 percent to $1.6 billion in January 2012.

Tetangco earlier said that the remittances this year will grow 5 percent from last year, or $1 billion more from the end-2011 level of $20 billion.

But the 5 percent growth forecast is slower than the previous years’ growth. In 2005, remittances grew more than 25 percent. Last year, remittances grew 7.2 percent.

Remittances are considered as among the “saving grace” of the Philippine economy as it drives consumer spending, increase savings and investments, and fuel growth in automobile and real estate sector.

Data shows that remittances make up 9 percent of the country’s GDP.

“Remittances from overseas Filipinos could surely contribute to the creation of new social assets and services, create more jobs that will contribute to the local economic development and community infrastructure such as schools, health centers, roads, and other community projects,” Tetangco said.

To further enhance the flows of remittances, the BSP and the Commission on Filipinos Overseas (CFO) yesterday officially sealed their partnership to establish the ReDC.

The ReDC is an advisory and policy-recommending body that will help organize and optimize the channeling of individual and collective remittances for national and local development.

According to lawyer Golda Roma of the CFO, the council will be responsible for tackling issues that concern the remittance business and to optimize the channeling of individual and collective remittances in the country.

“We will try to put the remittances in collective use,” Roma said.

During the signing, Tetangco said that monetary institutions should show appreciation to the OFW’s abroad. –JENNIFER AMBANTA, Malaya