Strong OFW remittances surprise ING
Strong domestic spending is seen to continue in the Philippines as remittance inflows remain robust, an economist of ING Bank Manila said.
Data released by the Bangko Sentral ng Pilipinas (BSP) Monday showed that cash remittances reached $2.499 billion in August 2017, 7.8 percent higher than $2.319 billion in Augist 2016 and the $2.283 billion in July 2017.
ING Bank Manila senior economist Joey Cuyegkeng, in a research note, said the faster growth of remittances from last month’s 7.1 percent expansion was an “upside surprise” because the margin between remittances and trade deficit “practically disappeared.”
Exports grew by 9.4 percent last August although imports posted a rebound and increased by 10.5 percent.
“The increase also supports higher domestic spending which in turn means firm imports ahead,” Cuyegkeng said.
Remittances accounts for around 10 percent of gross domestic product (GDP).
In 2016, cash inflows from Filipino workers overseas grew by five percent, higher than the central bank’s four percent target.
This year, the BSP expects remittance growth at four percent.
As of end-August this year, remittances rose by 5.4 percent to $18.595 billion. Including in-kind remittances, total remittances climbed 6.4 percent to $20.723 billion. (PNA)