Philippines: Remittances growth slowest in over three years
May 15, 2013
In March, remittances from Overseas Filipino Workers (OFW) increased 3.0% over the same month last year to USD 1.7 billion. The print was below the 6.0% expansion observed in February and marks the lowest rate recorded since August 2009. As a result of the lower annual reading, the trend continues to point downwards, with remittances adding USD 21.7 billion in the 12 months up to March, a 6.4% expansion over the same period last year (February: +6.5% year-on-year).
Despite the weak March reading, the Central Bank stated that remittance flows remain strong partially due to the sustained demand of Filipino skilled workers. Moreover, the continued efforts by the government to enhance welfare of OFWs and the improvement of services by bank and non-bank remittance providers are expected to boost remittances going forward. Remittances account for approximately 9% of GDP and are an important source of income for many Filipino families. Given its significance to the economy, OFW funds sent from abroad are one of the key drivers of private consumption in the country.
FocusEconomics Consensus Forecast panellists expect private consumption to grow 5.5% in 2013, which is unchanged from the previous month's projection. For 2014, the panel expects private consumption to expand 5.4%.