Barclays sees 5% rise in cash remittances this year

UK-based investment bank Barclays sees the amount of money sent home by overseas Filipinos growing faster this year despite the continued softening of oil prices in the world market and the tensions in the Middle East.

Rahul Bajoria, economist at Barclays Bank, said cash remittances from Filipinos abroad are expected to grow by five percent this year, faster than the 4.6 percent expansion reported last year.

“Looking ahead, we expect remittance growth to remain in positive territory in the first quarter of 2016, but it may be choppy given the currency volatility seen recently. We see remittances climbing five percent in 2016, as uncertainty around significant currency weakness in key regions such as ASEAN countries and the Middle East has subsided,” Bajoria said.

He pointed out the growth forecast of Barclays is more optimistic than the four percent target set by the Bangko Sentral ng Pilipinas (BSP).

“The BSP holds a more circumspect view and forecasts 2016 remittances will increase around four- percent to- five percent, as lower oil prices could dampen demand for overseas workers,” he added.

Cash remittances reached a record $25.78 billion last year or $1.14 billion higher than the $24.63 billion booked in 2014.

For December alone, the amount sent home by overseas Filipinos hit a new monthly record of P2.47 billion, exceeding the previous monthly record level of $2.35 billion.

BSP Governor Amando Tetangco Jr. earlier said cash remittances from land-based workers amounted to $20 billion while sea- based Filipino workers contributed $5.8 billion last year.

Tetangco pointed out the continued deployment of skilled overseas Filipino workers remained a key factor to the growth in remittance inflows.

Based on preliminary data from the Philippine Overseas Employment Administration ( POEA), the number of deployed overseas Filipino workers reached 1.8 million in 2015.

The POEA reported that approved job orders for the year reached 835,247, of which 45 percent have been processed.

These job orders were intended mainly for service, production, and professional, technical and related workers in Saudi Arabia, Kuwait, Qatar, Taiwan, and Hong Kong.

Likewise, the BSP reported commercial banks’ tie-ups, remittance centers, correspondent banks, and branches/representative offices abroad reached 5,424 last year, up 13.8 percent year on year.

“The increased presence of banks abroad and the introduction of new products and services for the benefit of overseas Filipinos continued to facilitate the channeling of remittances to the formal channels,” the BSP chief said.