MANILA - Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco said on Monday that remittances from overseas Filipinos, a key plank of the domestic economy, should grow between 2% and 3% this year over 2008, higher than government estimates.

"We expect remittances this year to exceed the 2008 level by 2 to 3%," Tetangco told Reuters in an interview in his office.

The central bank and the government have previously said 2009 remittances would remain flat from $16.4 billion last year as employers looked to shed jobs in the face of the global economic crisis. Economists, on the other hand, are expecting remittances to decline this year.

However, during the first 6 months of the year, the inflow of money from overseas Filipinos remained strong, reaching $8.459 billion, 2.9% higher than the $8.241 billion recorded in the same months in 2008.

Remittances are a major indicator of where the local economy is heading. They drive consumption, which fuels the engine of the economy usually more than government spending does.

Equivalent to over a tenth of domestic output, remittances also stabilize the peso and keep the balance of payments in surplus.

Tetangco said the country's balance of payments surplus should exceed $1 billion in 2009, higher than a previous estimate of $700 million. -abs-cbnNEWS.com, with Reuters