Structural forex inflows seen rising by 7.2% to $61.3 M

The central bank expects a higher structural foreign exchange (forex) inflows' growth this year of 7.2 percent or a total of $61.3 billion from $57.2 billion last year.

This is a higher projection compared to what was announced in November last year of $59.2 billion.

These inflows – from cash remittances, information technology and business process outsourcing (IT-BPO) and tourism – continue to give support to the overall balance of payments (BOP) balance.

The Bangko Sentral ng Pilipinas (BSP) expects cash remittances to grow by four percent – no change in assumptions – and the IT-BPO and tourism sector by 10 percent each.

While cash remittances and IT-BPO earnings’ growth estimates remained steady, there was a more significant change in the expected growth in the tourism receipts which the BSP now expects to climb to $7.7 billion from an earlier projection of $6.1 billion.

In 2017, travel receipts amounted to $7 billion. For the first quarter this year, the tourism sector reported $2.1 billion, up 51.4 percent year-on-year.

Cash remittances which are fund transfers via the banking networks and easily captured by the BSP, is expected to reach $29.2 billion this year while ITBPO earnings are projected to reach $24.4 billion, a growth rate of four percent and 10 percent, respectively.

Last year, cash remittances increased by 4.3 percent from 2016, while IT-BPO earnings went up by 9.6 percent. As of end-March, cash remittances totaled $7 billion and was up 0.8 percent year-on-year, while IT-BPO reported a 7.5 percent growth to $5.5 billion.