The Bangko Sentral ng Pilipinas (BSP) has revised its assumption on the growth of remittances by overseas Filipino workers (OFWs) in 2016, in light of the recent ups and downs in the volume of cash sent home by
migrant workers.
In particular, an earlier assumption of a 5-percent growth was recently reduced to 4 percent for 2016.
Latest BSP data showed that growth of remittances stumbled again in October and posted a below 1-percent expansion rate, despite expectations of increased money flow from Filipino migrants toward the last quarter of the year in preparation for Christmas expenditures.
Cash sent home by Filipinos working overseas hit a dismal 0.2-percent growth in October, after recovering in September this year.
Central bank officials explained the earlier dips in the growth of remittances as the consequence of a maturing labor export sector.
The recent revision of assumption, however, was due to the confluence of many factors, according to Diwa C. Guinigundo, central bank deputy governor for the Monetary Stability Sector.
“I think we need to recall that even the major markets for our OFWs have also been affected by the general slowdown in the global economy, so their propensity to employ overseas workers, including Filipinos, would also be moderated by this,” Guinigundo said.
He added that there are stricter restrictions abroad in sending money to the Philippines, which is also a factor that explains why remittances are slowing down.
“It is very difficult to say we are seeing a new normal. There could be some data loss on the process, because we see continued strength in consumption expenditure,” the deputy governor said.
He added that the value of remittances remains strong in the country, as the peso equivalent of those remittances retains their purchasing power as the peso depreciates against the US dollar.