BSP sees steady OFW remittance

Written by Jun Vallecera / Reporter

Thursday, 26 March 2009 23:47

THE Bangko Sentral ng Pilipinas (BSP), no matter the dour outlook painted by private economists on this year’s overseas Filipino worker (OFW) remittance, refused to yield to populist views and remained steadfast in the belief that OFW flows this year should remain steady. “The least that can happen to OFW flows this year is that its growth will be flat,” BSP Deputy Governor Diwa Guinigundo said on Thursday. He briefed reporters on details of last year’s balance of payments, or BOP, which stood as a surplus of only $89 million, sharply lower than that in 2007 totaling $8.56 billion. This year’s surplus, still without details, should also end as a surplus totaling at least $700 million, according to Guinigundo. OFW remittances are booked in the BOP under the current transfers subsector of the current account component of the balance. The lead regional economist at HSBC had said this year’s remittance flows were to slow down sharply and grow 13 percent slower. Later, economists at Citibank released a paper showing remittances this year slowing down by 20 percent. Guinigundo said while the country lost markets in South Korea and Taiwan, OFW deployment in some of the Middle East countries and elsewhere should compensate for it. He acknowledged the intensified risk aversion by global investors toward emerging markets like the Philippines really picked up in October last year and has not normalized thus far. This was why the BSP continues to struggle with its data and could not yet say for certain how much larger or smaller the year’s BOP numbers should be, Guinigundo said. Adjusted figures in last year’s BOP show the current account surplus sharply lower to just $4.227 billion from $7.119 billion in 2007. The capital and financial account, which keeps track of the net flow of investments, reverted to net outflow of $1.914 billion essentially because portfolio or “hot money” investments flowed outward on net basis last year