By Melissa Luz T. Lopez, Senior Reporter
REMITTANCES from overseas Filipino workers (OFWs) likely grew at a slower pace in November ahead of an expected surge the following month, HSBC Global Research said, adding that the indicator is on track to post another record for 2017.
HSBC economists expect remittances to pick up by 4.7% in November from a year earlier. If the projection pans out, it would represent a slowdown from the 8.4% increase logged in October, but monthly inflows will remain above $2 billion to sustain a trend seen since February 2016.
“This is partly driven by base effects, as remittances were unusually high in November 2016,” HSBC economists said in a report, referring to the 5.2% rise a year earlier.
The Bangko Sentral ng Pilipinas (BSP) will release the remittances data today. Money sent home by OFWs hit $23.056 billion in the 10 months to October 2017, up 4.2% from a year earlier.
Remittances support domestic consumption — which, in turn, fuels overall economic growth.
Despite the slower growth expected for the month, HSBC analysts said this provides more room for higher remittance growth just before the year’s end.
“This also sets us up for potentially high remittances in December, since remittances growth in 2017 reported thus far has been below its pace from the previous year,” the bank economists added. “We expect 2017’s average remittance growth to at least match 2016’s pace (5.4% average per month), which calls for higher remittances at the end of the year.”
Remittances peak every December as OFWs send more money for their families to spend during Christmas. However, a new record was reached in March 2017 when inflows hit $2.615 billion as migrant workers took advantage of a weaker peso so their remittances could go a longer way in peso terms.
The BSP expects full-year cash remittances to rise 4% from the $26.9 billion logged in 2016 to hit $28 billion.
The steady stream of worker remittances, coupled with business process outsourcing revenue, tourism receipts, and increasing investment flows are expected to support the country’s external position, as these will balance out increased importation and keep the trade balance at a narrow deficit.