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Freeman Cebu Business

Remittance growth seen despite Mideast chaos

Carlo S. Lorenciana - The Freeman

CEBU, Philippines - Growth can still be expected this year in remittances from overseas Filipino workers (OFWs) despite the geopolitical tensions in Middle East and the low oil prices, a bank official said yesterday.

Cebu Bankers Club President Maximo Eleccion though said that the effects of problems in the Middle East and low global oil prices will have to be factored in as far as forecasting remittance growth is concerned.

In December, the Bangko Sentral ng Pilipinas said it is projecting a 4 percent growth in remittances in 2016 amid the global economic slowdown and the weakening of other currencies against the dollar.

Citing historical records, Eleccion believes that OFW remittances have consistently posted an increase every year.

"In the past, OFW remittances posted growth every year in spite of financial difficulties the economies of the world encountered," Eleccion, relationship manager at Bank of the Philippine Islands, told The FREEMAN.

On Friday, the BSP reported that personal remittances, which include both cash and in-kind transfers, rose 4.4 percent in 2015 to $28.5 billion, exceeding the central bank's 4 percent projection for the year.

"The sustained growth in personal remittances during the year was driven by the steady increase in remittances from land-based workers with work contracts of one year or more (by 4.4 percent) and from sea-based and land-based workers with work contracts of less than one year (5.3 percent)," BSP earlier said in a statement.

Remittances in 2015 accounted for 9.8 percent of the gross domestic product (GDP) and continued to be a major driver of domestic demand, BSP noted.

The central bank said the continued deployment of skilled Filipino workers abroad remained a key factor to the growth in remittance inflows.

Citing data from the Philippine Overseas Employment Administration, BSP said the number of OFWs in 2015 reached 1.8 million; while approved job orders reached 835,247, 45 percent of which have been processed.

The increased presence of banks abroad and the introduction of new products and services continued to facilitate the channeling of remittances to formal channels, BSP said.

As of 2015, commercial banks' tie-ups, remittance centers, correspondent banks and branches/representative offices abroad reached 5,424, up 13.8 percent from the 2014 level.  (FREEMAN)

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