By Melissa Luz T. Lopez
CASH REMITTANCES sent by overseas Filipino workers (OFWs) likely surged in February to log a double-digit increase, a global bank said, following a slowdown seen as the year opened.
Analysts at HSBC Global Research said remittances likely grew by 14.7% for the month, which if realized would be a pickup from the 9.7% climb posted in January and the 3.4% increase posted in February 2017.
It would also be the fastest pace since an 18.5% growth in November 2016, and would mean that inflows reached at least $2.4 billion that month.
The Bangko Sentral ng Pilipinas (BSP) will report the latest remittances tally today.
“We expect a sequential uptick of remittances in February following a decline in the previous month due to the holidays. This should lead to sharp rise of 14.7% year-on-year,” HSBC analysts said in its weekly report.
The expected surge in remittances from OFWs likely mirrored robust expansion in money transfers in most regions, particularly by “higher shipments” from Asia and the Americas, the bank analysts said, with the trend seen sustained for the rest of 2018.
“We expect overall remittances to rise at a faster rate this year after being at a below-trend pace in 2017,” the report read, as published over the weekend.
The central bank expects remittances to grow by another four percent this 2018 to reach above $29 billion.
Remittances grew by 4.3% to reach $28.06 billion in 2017 to post another banner year.
HSBC analysts previously flagged that the recent deployment ban to Kuwait announced by President Rodrigo R. Duterte stands as a source of risk to inward cash transfers, although central bank officials said that OFWs are likely to find other employment opportunities abroad for them to keep sending funds to their families back home.
Economists said the sustained growth in remittances reflect improving global growth led by the United States, which is the biggest source of money transfers. Higher oil and commodity prices also helped boost OFW incomes, especially those working in the oil-rich Middle East economies.
The weakness of the peso versus the dollar also provided an additional incentive for workers to send more money home, as their foreign currencies get bigger values once converted into the local unit.
The peso averaged P51.7856 against the greenback in February, weaker than the P49.9614 average recorded during the same month last year, according to BSP data.
Remittances fuel domestic consumption, which in turn supports overall economic growth. It also stands as a counterweight to the country’s huge import activities, which keeps the country’s external position at a modest deficit.