Philippines: Remittances post solid growth, but retreat from record high
March 17, 2014
In January, remittances from Overseas Filipino Workers (OFW) increased a solid 7.0% over the same month last year, reaching USD 1.8 billion. The print was below December's 9.1% expansion, which amounted to a record-high of USD 2.2 billion. Nevertheless, the upward trend remains in place as remittances totaled USD 22.9 billion in the 12 months up to January (December: USD 22.8 billion). The increase represented a 6.3% expansion over the same period last year (December: +6.4% year-on-year). Remittances, which account for approximately 9.0% of GDP, are an important source of income for many Filipino families and thus a key driver of private consumption. The record high remittances recorded in previous months were driven by a response to the typhoon that struck in November as well as by the holiday season. However, the Central Bank explained that, “the level of remittances typically drops after the year-end holiday season.” FocusEconomics Consensus Forecast panelists expect private consumption to grow 5.4% in 2014, which is unchanged from the previous month's projection. For 2015, the panel also expects private consumption to expand 5.4%.
Author: Carl Kelly, Economist