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Philippines: Remittances seen to grow by 4%
MANILA, Philippines — Security Bank Corp. expects remittances from overseas Filipino workers (OFWs) growing by four percent to a record high $31 billion this year due to the ongoing global rollout of COVID-19 vaccines.
Data from the Bangko Sentral ng Pilipinas (BSP) showed personal remittances slipped by eight percent to $33.19 billion last year from $33.47 billion in 2019, while cash remittances coursed through banks declined by 0.8 percent to $29.9 billion from the previous all-time high of $30.13 billion.
Prior to last year, remittances last contracted to $6.03 billion in 2001 from $6.05 billion in 2000 primarily due to the Asian financial crisis and the political controversies during the administration of former president Joseph Estrada.
In a recent webinar titled “Swimming the Trenches,” Security Bank chief investment officer Noel Reyes said last year’s remittance figure was even better than the central bank’s revised forecast of a two percent contraction and an earlier forecast of a five percent decline during the peak of the pandemic.
Reyes said the actual figure was also better than the World Bank’s projection of a 13 percent contraction during second quarter of 2020.
“With vaccination programs underway, this will continue to improve,” Reyes said.
Security Bank’s projected growth is in line with the four percent target set by the BSP for OFW remittances for 2021. Remittances accounted for 9.2 percent of the country’s gross domestic product (GDP) last year.
The Philippines slipped into recession in 2020 with a record economic contraction of 9.5 percent.
Meanwhile, Security Bank also sees growth opportunities with the enactment of the Financial Institutions for Strategic Transfer (FIST) bill as well as the impending signing of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill.
For his part, Security Bank president and chief executive officer Sanjiv Vohra said in a roundtable discussion with The Asian Banker that consumer confidence may return to pre-pandemic levels as countries around the world begin massive vaccine rollouts.
“Once more countries are able to rollout mass inoculations and prevent new infections, we will see consumer confidence go up gradually and we will see sequencing of recovery. However, recovery will not be the same for everyone. We will see some industries recover faster than others,” Vohra said.
Source: https://www.philstar.com/business/2021/03/26/2086969/remittances-seen-grow-4