Foreign currency deposits in RP remains stable amid shaky financial markets

MANILA, Philippines - Foreign deposits in Philippine banks remain stable despite the ongoing global financial meltdown, the Bangko Sentral ng Pilipinas (BSP) said. BSP deputy governor Diwa C Guinigundo said remittances are still at healthy levels since many Filipinos overseas are in countries which are not badly hit by the economic slowdown. While the Philippines is not spared from the impact of fleeing dollars, Guinigundo noted that remittances from US-based Filipinos account for only 30 percent of the inflows from overseas Filipinos. Sixty percent of Filipinos working abroad, Guinigundo said, are in oil-rich countries in the Middle East which are hardly hit by the financial crisis. The central bank official noted that the income of overseas Filipinos has also been on an uptrend in the last five years. “So if you have a deployment rate that is strong and average income also remaining strong relative to what we saw ten to 15 years ago, I think a ten-percent growth in remittances would continue to be realistic in 2009 against 2008," Guinigundo said. He added that there is "less likelihood" of a massive withdrawal of foreign deposits considering that FCDU levels have "been quite stable" while the global crisis has been crippling financial markets in the past three months. Guinigundo said this indicates that secondary reserves of about $21 billion to $26 billion would “very well cover any maturing obligations for the next 12 months." “I’m not sure if FCDUs will start showing some decline. In fact, some of those foreigners who have pulled out from the stock market and government securities, some of them parked their dollar proceeds with the FCDUs," Guinigundo added. - GMANews.TV