Remittance growth to remain at a single digit — paper

First Metro Investments Corp. and the University of Asia and the Pacific (UA&P) expect money sent home by Filipinos abroad to grow by 6-8 percent this year amid a slow global economic recovery. "With the improvement of our host countries' economies, we [expect] remittances growing by 6-8 percent this year," First Metro and UA&P said in a research note. The note also said the Monetary Board would likely maintain the benchmark interest rate at 4 percent in the first half. "The current monetary policy stance of the [central bank] will likely be unchanged, even though we think it is not even sufficiently loose to stimulate the domestic economy, given a debt-constrained fiscal sector," it added. It said inflation might come in at 4.3 percent this quarter, within the central bank's target of 3.5-5.5 percent, since crude oil prices have stabilized despite the unusually cold winter in the West and as food supplies continue to be adequate. First Metro and the UA&P expect single-digit overseas remittance growth of 4-6 percent in dollar terms in the first quarter. "But in peso terms this will be closer to zero, thus giving little added stimulus to the economy," FMIC and UA&P said. The central bank expects dollar remittances to grow by at least six percent this year from a record $17.1 billion last year. Latest central bank data showed that overseas remittances posted 5.1 percent yearly growth to $15.78 billion as of November last year. For November alone, remittances grew by 11.3 percent to 1.459 billion, the fastest in 14 months. Major sources of remittances included the US, Canada, Saudi Arabia, United Kingdom, Japan, Singapore, United Arab Emirates, Italy and Germany. The research noted that while not as high as in previous years, dollar remittances outperformed expectations of negative to flat growth by several foreign institutions. "As expected, these remittances kept the Philippine economy buoyant while neighboring countries, except for Indonesia and Vietnam, saw their economies shrink in 2009," it added. Meanwhile, the economy will likely grow by 4.5 percent this quarter, higher than the government's 2.6-3.6 percent full-year projection. — NPA, GMANews.TV