Remittances seen to rise this year, breaking last year's records
10/05/2009 | 07:13 PM
Filipinos working abroad are expected to send more money home this year, breaching a record-high last year, a report made by the University of Asia and the Pacific (UA&P) and the investment banking unit of the Metrobank group said.
Remittances are seen to reach almost $17 billion this year, an increase of 3.5 percent, or $574 million, from last year's $16.4 billion record, the UA&P and First Metro Investment Corp. (FMIC) said in its latest Market Call Capital Markets Research.
Rising remittances will help the Philippine economy expand by 2.2 percent this year, the report added. Remittances boost personal consumption, which comprise an estimated 70 to 80 percent of the economy.
The forecast only tracked a previous projection issued by the Bangko Sentral ng Pilipinas (BSP) which has been monitoring remittances since the early 90s. The BSP, which also regulates the banking sector, was prompted to raise its expectations to three percent from the previous zero percent, after remittances rose by 3.8 percent to $10 billion from January to July.
Despite the global downturn, remittances reached 9.3 percent in July this year, its highest year on year growth, owing to sustained demand for overseas Filipino workers (OFWs), data from the BSP said.
“Given the resiliency of OFW dollar remittances in the first seven months, highlighted by an impressive 9.3 percent jump in July, we are revising upward our forecast for the whole year to a positive 3.5 percent growth," FMIC and UA&P stated.
Although some OFWs lost their jobs, this was offset by hiring agreements between the Philippines and other countries which saw more Filipinos securing their jobs abroad.
As a result, higher remittances will boost consumption, helping the Philippine economy to expand by at least two percent in the third quarter and 4.2 percent in the fourth quarter. Taken together, second-half results will help the economy reach a 2,2 percent growth, surpassing the government's previous growth projections
Earlier, the government expected the economy to grow only by 0.8 percent to 1.8 percent this year.
“Our outlook has mellowed only mildly. GDP growth in the third quarter is likely to barely exceed 2 percent. But we expect a more robust export demand and early election spending to boost GDP by 4.2 percent in the fourth quarter, and lead to a full-year average of 2.2 percent," the study revealed.
The Philippine economy grew by one percent for the first half, still lower than the four percent recorded during the period, despite a sustained decline in exports.
The economy was able to ward off recession threats with the help of a stimulus package -- deemed insufficient by some sectors -- as well as a series of sustained rate cuts from the BSP.
“Given the clearly benign inflation outlook until 2010 and the feeble economic recovery so far, we do not discount a further rate cut before the end of the year. This goes, of course, against conventional thinking," the companies added.
The country’s GDP grew by 1.0 percent in the first half of the year from 4.0 percent after the country’s domestic output expanded by 1.5 percent in the second quarter and by 0.6 percent in the first quarter. - GMANews.TV
Remittances are seen to reach almost $17 billion this year, an increase of 3.5 percent, or $574 million, from last year's $16.4 billion record, the UA&P and First Metro Investment Corp. (FMIC) said in its latest Market Call Capital Markets Research.
Rising remittances will help the Philippine economy expand by 2.2 percent this year, the report added. Remittances boost personal consumption, which comprise an estimated 70 to 80 percent of the economy.
The forecast only tracked a previous projection issued by the Bangko Sentral ng Pilipinas (BSP) which has been monitoring remittances since the early 90s. The BSP, which also regulates the banking sector, was prompted to raise its expectations to three percent from the previous zero percent, after remittances rose by 3.8 percent to $10 billion from January to July.
Despite the global downturn, remittances reached 9.3 percent in July this year, its highest year on year growth, owing to sustained demand for overseas Filipino workers (OFWs), data from the BSP said.
“Given the resiliency of OFW dollar remittances in the first seven months, highlighted by an impressive 9.3 percent jump in July, we are revising upward our forecast for the whole year to a positive 3.5 percent growth," FMIC and UA&P stated.
Although some OFWs lost their jobs, this was offset by hiring agreements between the Philippines and other countries which saw more Filipinos securing their jobs abroad.
As a result, higher remittances will boost consumption, helping the Philippine economy to expand by at least two percent in the third quarter and 4.2 percent in the fourth quarter. Taken together, second-half results will help the economy reach a 2,2 percent growth, surpassing the government's previous growth projections
Earlier, the government expected the economy to grow only by 0.8 percent to 1.8 percent this year.
“Our outlook has mellowed only mildly. GDP growth in the third quarter is likely to barely exceed 2 percent. But we expect a more robust export demand and early election spending to boost GDP by 4.2 percent in the fourth quarter, and lead to a full-year average of 2.2 percent," the study revealed.
The Philippine economy grew by one percent for the first half, still lower than the four percent recorded during the period, despite a sustained decline in exports.
The economy was able to ward off recession threats with the help of a stimulus package -- deemed insufficient by some sectors -- as well as a series of sustained rate cuts from the BSP.
“Given the clearly benign inflation outlook until 2010 and the feeble economic recovery so far, we do not discount a further rate cut before the end of the year. This goes, of course, against conventional thinking," the companies added.
The country’s GDP grew by 1.0 percent in the first half of the year from 4.0 percent after the country’s domestic output expanded by 1.5 percent in the second quarter and by 0.6 percent in the first quarter. - GMANews.TV
