ABS-CBN News Online Beta

BSP: Remittances may rise in 2009

Reuters | 07/01/2009 1:16 PM

Printer-friendly version | Send to friend | Share your views

MANILA - Remittances from overseas Filipinos may rise this year, with signs of sustained demand for Filipino workers from Canada, Australia and some countries in the Middle East, a central bank report said.

Central bank officials previously said remittances may be steady this year at the 2008 total of $16.4 billion.

"With the continued growth in remittances for the first four months of 2009, the projected flat growth for the full year 2009 is turning out to be relatively conservative," said a report on remittances posted on the central bank Website on Wednesday.

Remittances are a key pillar of domestic consumption and economic growth, but government officials have said most recipients are resorting to saving their money instead of spending due to worries on the depth and duration of the global recession.

They forecast economic growth to slow to just 0.8-1.8 percent this year from a previous goal of 3.1-4.1 percent.

Inflows of remittances from Filipinos living and working abroad reached $5.5 billion in the first four months of the year, up 2.6 percent from the same period of 2008, with monthly inflows above $1.2 billion so far this year.

A Reuters poll in May showed analysts expect remittances this year to contract 5 percent from 2008 due to job cuts, a freeze in wage hikes and the tendency of host countries to hire more unemployed locals.

But the central bank report said favourable developments in demand for Filipino workers were providing "some reason for optimism" in remittance growth this year.

The government's overseas welfare agency expected demand for Filipino workers to "remain strong" in Canada, Bulgaria, Australia, the United Arab Emirates and Qatar, the report said.

Saudi Arabia could also continue to hire Filipino workers to fulfill its plan of creating six megacities in the coming years, according to the report.

Japan may also hire more nurses and caregivers from the Philippines after an economic partnership accord between the two countries took effect in January. The first batch of Filipino medical workers under the new accord arrived in Japan in May.