Remittances rose 15% to $9.3b in first eight months
Eileen A. Mencias
Manila Standard
Remittances from Filipinos working abroad rose 15 percent to $9.3 billion in the first eight months of the year despite a drop in deployment, the Bangko Sentral ng Pilipinas reported yesterday.
The central bank attributed the growth in remittances to increased demand for labor in advanced economies and improved services of banks that encouraged more money transfers through formal channels.
The central bank said some remittance centers were now planning to convert themselves into banks to expand their services by next year.
Remittances in August amounted to $1.2 billion, up 10.6 percent from a year ago or 10.09 percent higher than $1.096 billion in July.
The central bank expects remittance coursed through banks to hit $14 billion this year, with about $700 million passing through informal channels.
Citing data from the Philippine Overseas Employment Administration, the central bank said deployment dropped by 3.7 percent in the eight-month period to 726,620 from a year ago.
Deployment of land-based workers fell 1.6 percent to 560,356 while that of sea-based workers dropped 10.2 percent to 166,264.
The central bank blamed the drop in deployment of sea-based workers to shortfalls in the supply of marine officers to fill up vacancies in foreign shipping vessels, delays in the issuance of working visas and competition from other Asian and European seafarers.
“While remittances have grown rapidly in recent years, their sudden acceleration was merely a statistical illusion [due to the formalization of remittance channels]. Thus, the recent slowdown should not be interpreted too literally. Once the formalization process has run its course, we believe the growth rate of officially recorded remittances is bound to slow,” HSBC economist Frederic Neumann said in a commentary released last week.
Neumann said demand for Filipino labor would continue because of the aging population of developed economies. He added remittance flows to the Philippines were likely to prove relatively robust because Filipinos tended to be employed in the healthcare and education sectors, rendering them less vulnerable to a possible US slowdown.
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