Metrobank unit sees 4%-6% growth in OFW remittances

MANILA, Philippines - First Metro Investment Corp. (FMIC), the investment arm of the Metrobank Group, said it expects a four- to six-percent growth in remittances this year despite a strengthening peso against the dollar.

Remittances from overseas Filipinos already amounted to $12.789 billion in the first nine months of the year, or 4.2 percent higher than the previous year period. In the month of September alone, remittances grew 8.6 percent.

“The OFW remittances levels are debunking all projections made by ratings agencies, supranational institutions and international banks,” FMIC said in a report.

The Bangko Sentral ng Pilipinas (BSP) projected money transfer by overseas Filipinos to expand by at least four percent to a record $17.1 billion this year from $16.4 billion 2008. Including the so-called informal sector, it is estimated to expand to $19 billion.

Remittances, which account for 10 percent of gross domestic product (GDP), fuels private consumption, one of the growth drivers of the domestic economy.

The FMIC report said strong demand and broader access to remittance-linked services by banks continue to usher in the growth of money sent by overseas Filipinos.

The Philippines Overseas Employment Administration (POEA) reported that total job orders processed already reached 226,260 as of end-October. “While it already accounts for 43.39 percent of the jobs needed, agreements are still being negotiated to ensure that the demand for overseas Filipinos will remain steady,” it added.

Major sources of remittances include the US, Canada, Saudi Arabia, UK, Japan, Singapore, United Arab Emirates, Italy and Germany.

FMIC said that the steady growth of overseas remittances is somewhat tempered by the appreciation of the peso.

“The peso averaged 48.14 to the dollar in September, a meager 3.1 percent depreciation from last year’s level. This tempered the growth in overseas Filipino remittances in peso terms,” it added.

The peso is forecast to end the year at 46.86 to the dollar, but slightly weaken to 47.57 in the first few months of 2010.