Philippines: Remittances vulnerable

Remittances, one of the cornerstones of the economy, will be adversely affected by the slowing down of the US economy.
Analysts fear that a recession in that country will have a bigger bite on the amount of money sent home by those living in the US compared to its impact on exports.

Similarly with 10 percent of the population working abroad, its impact will be considerable on almost every other Filipino family.
Frances Cheung, economist of the British banking giant, Standard Chartered Bank, yesterday said that "while the Philippines ’ trade linkage with the US is not particularly strong compared to its many other Asian neighbors, over half of the OFW remittances come from the Americas , particularly the US".

"Recent monthly remittance flows have been volatile. Nevertheless, it rose by a decent 18 percent year on year in the first half," she said.
A growth in OFW inflows of between 10-15 percent for the whole year in 2007, which is in line with the government’s 10-percent forecast, is "good enough to support spending," the Hong Kong-based analyst said.
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