Experts disagree on remittances
By Jun Vallecera, Business Mirror | 06/30/2009 11:37 PM
Printer-friendly version | 
Send to friend | 
Share your views
MANILA - Overseas Filipino worker (OFW) remittances this year could be off by as much as 30 percent of last year to something like $11 billion to $12 billion, seen by the government as putting at risk gross domestic product (GDP) growth that has already inched just 0.4 percent in the first quarter.
The New York-based global lender Citibank, at its most recent Asia-Pacific market analysis, forecast this drop, coupled with a significant decline in OFW deployment. The assessment contrasted sharply with the view of First Metro Investment Corp (FMIC), the investment-banking arm of the Metropolitan Bank and Trust Co., or Metrobank.
FMIC said latest data from the Bangko Sentral ng Pilipinas show remittances “persist to exhibit signs of sustainability” despite the lingering global economic crisis, noting the 2.2-percent growth in remittances in April.
Acknowledging this as slower than the 3.1 percent in March, it said, “Even so, it can also be observed that OFW remittances for the first four months of the year now stand at $5.5 billion, up by 2.6 percent from last year’s levels.”
It was also clear to the FMIC analysts that remittances stayed steady. “Despite posting a minimal growth, it is still on track in defying the consensus that OFW remittances will register significant negative growth this
year.”
The assessment added that, “Moreover, with the government’s employment deals with several countries in need of our workers, the risks from the continuing global economic recession affecting the remittances are being tempered.”
It also said the 2.2-percent remittance growth in April “actually translated to a huge 17.9-percent growth” in peso terms during the month, owing to exchange adjustment from the 0.5-percent appreciation of the peso from March to April.
The exchange rate averaged P48.458 per dollar in March and improved further to P48.217 per dollar in April, based on BSP data.
“Given that we are now past the months with high OFW remittances, we do not expect dollar remittances to post large growth rates. Nevertheless, we should still expect positive growth given the sustained deployment of migrant workers to different countries,” the FMIC said.
Comments