MANILA: Global economic slowdown and the weakening of other currencies against the US dollar points to low projected growth of cash remittances from OFWs the Bangko Sentral ng Pilipinas (BSP) has said.
Philippine Star quoted BSP deputy governor Diwa Guinigundo as saying the growth of cash sent home by Filipinos to their loved ones in the Philippines is slightly lower at four percent, instead of the earlier projection of five percent.
The BSP was earlier looking at a five-percent growth target for cash remittances from Filipinos abroad to $25.6 billion this year. The amount of money sent home by Filipinos abroad grew 5.9 percent to $24.35 billion in 2014 from $22.98 billion in 2013, the report said.
However, cash remittances grew only by 3.7 percent to $20.64 billion from January to October this year compared to $19.91 billion in the same period last year, it added.
Guinigundo also reportedly said the de-risking by global banks by enforcing stricter regulatory measures on remittance business in compliance with the Financial Action Task Force (FATF) guidance has affected the growth of cash remittances.
He pointed out some of the domestic bank accounts in global banks have been closed due to money laundering concerns such as terrorist financing and others, the Philippine Star report said.
However, he reportedly assured there is continued strength in terms of consumption expenditures that have been supported by remittances.
Likewise, he noted steady investments especially in the real estate business that is supported by cash remittances from Filipinos abroad.
“So I think at this point it is difficult to say that we are seeing a more permanent shift to a lower normal remittances which we should see some recovery moving forward,” Guinigundo was quoted as saying by Philippine Star.
For 2016, Guinigundo reportedly said remittances are expected to increase four percent to $26.3 billion on account of the steady deployment of Filipino workers, greater diversification of country destinations, and shift to higher-skilled types of work.