Remittances seen to fall by yearend, govt admits

MANILA, Philippines - Funds sent home by Filipinos working abroad may decline for the latter part of the year, the Bangko Sentral ng Pilipinas said (BSP), echoing recent announcements made by the International Monetary Fund (IMF). Remittance growth may slow to 15 percent from 18 percent for the second half of the year, BSP Deputy Governor Nestor A. Espenilla said. He recognized that the effects of the credit crunch felt at both sides of the Atlantic Ocean will affect Filipinos working in various cities from Milan to Miami. “Our original projection was 10 percent anyway and we’re already ahead of the projection as of July," Espenilla said. “But of course now factoring in the impact of what’s happening in host countries, we’re now estimating some slowing down. On a yearly basis, that’s 15 percent and it’s still pretty decent." Despite lower projections, remittances would still significantly form part of the country’s foreign exchange reserves, Espenilla said. Half of the country’s dollar reserves—projected to hit anywhere from $36 billion to $37 billion—are from remittances. He added that remittances “will remain resilient" because Filipinos who send money home are employed in rich countries unaffected by the credit crunch. Filipinos continue to seek their fortunes in the oil-rich economies of Middle East, which remain safe from the effects of the credit crunch. Espenilla also said that remittances from the US would also be safe since these usually come from health professionals whose employment would not be affected by the slowdown. From January to July this year, remittances from an estimated eight million overseas Filipinos workers (OFWs) have reached $9.608 billion, 18.2 percent higher than the inflows recorded in the same period last year. Ever since the beginning of the new millennium, remittances—which benefit at least 40 million residents at home—have increased by ten percent annually but that trend may end this year. In a Washington, DC press conference held last week, IMF Deputy Director Charles Collyns was quoted to have said that “economies like the Philippines, and also in Central America, the Caribbean, perhaps in emerging Europe as well, will be affected by slowing inflows from remittances, in a similar way to slowing demand for their export goods." - GMANews.TV