Remittances seen rising by at least 8% in 2010

Written by Erik de la Cruz / Reporter

Tuesday, 22 December 2009 19:50

FROM an expected growth of at least 4 percent this year, remittances of Filipinos abroad are likely to be stronger in 2010, possibly rising by at least 8 percent, as recession-hit countries hosting tens of thousands of Filipino workers are now recovering, according to DBS Bank. The Singapore-based institution, Southeast Asia’s largest bank, expects the crisis-hit economies of the US, Japan, Singapore and Hong Kong to grow in excess of 4 percent in 2010, “which could well mean remittances growing by 8 percent or more.” A growth of 8 percent means remittances next year will exceed $18 billion, from the projected level of $17.1 billion this year, which is based on Bangko Sentral ng Pilipinas (BSP) forecast of at least 4-percent growth from last year’s $16.4 billion. The reported figure does not include money sent through nonbanking channels. The DBS forecast is more bullish than the BSP’s latest projection, which is for remittances to rise by 6 percent in 2010. The bank was among several foreign financial institutions that had painted a grim scenario for remittances to the Philippines this year, projecting a contraction because of the global downturn. But they were all proven wrong as remittances continued to rise and kept the domestic economy afloat while many rich nations plunged into recession. “Remittances next year should grow even more strongly than they have this year as the global economy reflates,” said DBS economist Lim Su Sian, who projected a growth of 4.8 percent for the Philippines’ gross domestic product in 2010. “[Higher remittances] should help to keep consumer spending supported.” Lim expects private consumption expenditure in the Philippines to rise by 4.8 percent next year, from this year’s projected 3.4-percent growth. The increased spending of Asian consumers is now seen driving economic growth in the region at a time global trade remains in the doldrums. Remittances course through banks rose by 6.7 percent in October to $1.5 billion, bringing the cumulative inflows for the first 10 months of the year to $14.3 billion, representing a growth of 4.5 percent over the same period last year. The BSP attributed the steady growth in remittances to the conti-nued deployment of Filipino workers abroad. “The country’s long-term deployment outlook has remained favorable in the Middle East countries, specifically in Saudi Arabia’s construction and health workers,” BSP Governor Amando Tetangco Jr. in a recent statement.