PHILIPPINES: Remittances seen growing 13% to $16.9B

By Doris Dumlao
Philippine Daily Inquirer

Posted date: December 25, 2008

MANILA, Philippines—The Philippine banking system will likely capture $16.3 billion in overseas Filipino remittances this year, up 13 percent from a year ago, despite the major global economic downturn, the Bangko Sentral ng Pilipinas estimated.

Including money sent home through non-banking channels, remittances this year will likely total $16.9 billion or about 10 percent of domestic economic output, BSP officials said in a press briefing.

Largely owing to these remittances, the BSP has projected that the country could end the year with a modest balance-of-payments surplus of $500 million, much smaller than the record-high $8.5 billion in 2007.

Large foreign capital outflows triggered by the US-centered global financial crisis trimmed the country’s BOP surplus this year, but overseas remittances as well as receipts from business process outsourcing supported a sustained surplus, Bango Sentral Deputy Governor Diwa Guinigundo said.

The BOP measures the foreign exchange transactions between the local economy and the rest of the world. Any transaction that gives rise to a payment by a Philippine resident like importation or debt servicing is a deficit item in the BOP while any that gives rise to a receipt like borrowing, exporting or overseas Filipino remittance is a surplus item. Read more