Domestic growth is seen to be continuously supported by inflows from overseas Filipino workers (OFWs), which remains resilient amidst the repatriation of around 700,000 workers since the pandemic hit in 2020.
On Friday, the Bangko Sentral ng Pilipinas (BSP) reported the 5.1 percent year-on-year jump in cash remittances last August to USD2.609 billion and the 5.7 percent increase in the first eight months this year to USD20.38 billion.
However, the cash remittance inflows last August are lower than the previous month’s USD2.853 billion, which Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort, in a report, said is fine since the latest figures remain one of the highest since the height of the pandemic last year when strict quarantine measures were implemented.
“Thus, OFW remittances nevertheless remain a bright spot for the Philippine economy, still among the highest since the pandemic started and still near record highs,” he said.
Ricafort explained that said remittance inflows are seen to post further increases as the Christmas holiday nears, thus, a plus for consumer spending, which accounts for around 70 percent of the economy, and the economic recovery.
The further reopening of economies in OFW-host countries is another boost to remittances, especially in areas where there is increased demand for medical and economic front-liners, he said.
“Sustained growth in OFW remittances would add to the country’s balance of payments (BOP) and gross international reserves (GIR); would also fundamentally provide greater support/cushion/buffer for the peso exchange rate especially vs. any speculative attacks,” he added. (PNA)