The remittances sent by Overseas Filipino Workers (OFWs) across the world for August 2016 have shown significant improvement compared with the previous months.
According to a Manila Times report, “Money sent home by Filipinos working abroad rebounded in August.” The article also mentioned that “analysts are upbeat that the central bank’s $26.8 billion target for the whole of 2016 is ‘doable.’”
Central bank data tells us that personal remittances reached $2.55 billion which means it is up by 16% compared to the data of previous year. It has also reversed the 5.4% decrease seen in July. In perspective, this is the biggest gain so far in the past 29 months.
Manila Times continued:
“For the first eight-months of the year, remittances stood at $19.48 billion—just $7.32 billion shy of the full-year target of the Bangko Sentral ng Pilipinas—and up 4.4 percent versus the same period in 2015. The BSP’s full-year target represents a 4 percent rise from $25.77 billion recorded in 2015.”
Thus, BPI economist Nicholas Mapa felt prompted to remark that “the BSP’s assumption for a 4 percent growth rate (for the whole year) still appears doable.”
“The bump up in remittances this month may easily be offset by a slip in September as the peso weakens, thereby limiting the need for overseas Filipinos to send home an increased amount of dollars to fund a fixed peso consumption or investment amortization,” added Mapa.
On the other hand, Joey Cuyegkeng, senior economist of ING Bank, believes the remittance growth will not be sufficient to have a significant impact on the negative effects on the trade deficit of country’s current account.
“An estimated $1 billion positive swing in remittances wouldn’t suffice to prevent an estimated $11.6 billion negative swing in the trade deficit from producing a current account deficit,” Cuyegkeng said.