Remittances seen to beat target

THE BANGKO Sentral ng Pilipinas (BSP) expects to breach its remittance target of 5% more than in 2012 on the back of higher inflows, buoyed by seasonal flows and money sent home by relatives of those affected by typhoon Yolanda (international name: Haiyan), the central bank chief said.

"With the reports we are getting now, there is an increase in remittances, but you cannot segregate remittances due to the calamities and those due to seasonal flows," said BSP Governor Amando M. Tetangco, Jr. at a media forum last Friday, when asked if the central bank expects more remittance inflows towards the end of the year amid expectations of larger inflows due to typhoon Yolanda.

"At this point in time, we are no longer changing the forecast of 5% for the year. But our January-to-September growth rate of remittances is actually 5.8%, so it looks like we will exceed the projected whole year growth of 5%," Mr. Tetangco continued.

This is in line with BSP Deputy Governor Diwa C. Guinigundo’s earlier statement that the volume of money sent home by overseas Filipinos is expected to post higher-than-normal rates towards the end of the year due to expectations that migrant Filipinos will send more money home to support families affected by the typhoon, which battered the central Philippines last month.

Remittances rose by 5.27% to $1.935 billion in September from a year ago. The result is the biggest so far this year and brought the year-to-date tally to $16.480 billion, up 5.84% from last year.

The central bank aims for remittances to rise by 5% this year from the $21.391 billion recorded last year.

The amount of money sent home by Filipinos abroad usually rises towards Christmas and the enrollment season.

However, due to the calamities that recently struck the country, remittances are expected to rise above normal levels, central bank officials said.

"If you look at the experience in remittances during typhoons Pepeng and Ondoy in 2009, there was an increase in the rate of growth of remittances from about 5% or 6% per annum to 11% per annum towards the end of 2009; this is the year-on-year growth seen on a monthly basis. [Regarding] the cumulative growth by 2009, there was an acceleration by about .5%," Mr. Tetangco explained.

For next year, meanwhile, he said "the BSP is keeping the 5% target" but noted that the central bank’s projections are being reviewed periodically to take into account various developments.

Remittances are normally equivalent to 10% of the gross domestic product (GDP), and previous disasters have seen an increase of up to 15%.

Super typhoon Yolanda, devastated parts of the central Philippines last month, causing 5,632 deaths and P30.65 billion in infrastructure and agriculture damage, according to the National Disaster Risk Reduction and Management Council’s latest report yesterday. -- Ann Rozainne R. Gregorio

source:  Businessworld