MANILA, Philippines - London-based Capital Economics Ltd. is projecting that the amount of money sent home by Filipinos abroad will grow by seven to nine percent next year on the back of the global economic recovery.
In a report called Emerging Asia Economics Update, Kevin Grice, senior international economist at Capital Economics, said the projected growth in overseas Filipino workers’ (OFW) remittances next year is almost double the five-percent growth projected for this year.
“We forecast that remittances will rise seven percent to nine percent in 2010, after average growth of around five percent this year,” Grice said.
The growth forecast of the research firm is more optimistic than the target set by the Bangko Sentral ng Pilipinas (BSP) for 2009 and 2010. The BSP sees OFW remittances increasing by four percent to a record level of $17.1 billion this year from the previous all-time high of $16.4 billion last year.
OFW remittances climbed by 4.5 percent to $14.321 billion from January to October this year compared with $13.707 billion in the same period last year. This after the BSP booked a new monthly record high of $1.531 billion in October due to higher transfers to help beneficiaries rebuild the damages caused by the recent natural calamities.
“Worker remittance inflows, although disappointing in October, have also stayed generally strong and should climb more rapidly in November and December ahead of Christmas,” Grice said.
The BSP sees OFW remittances expanding by six percent next year.
The economist pointed out that remittances would continue to boost the country’s economy which is expected to grow by 4.5 percent next year.
“For 2009, growth will probably come around the mid-point of the 0.8 percent to 1.8 percent government target range, and we still forecast that GDP growth will accelerate in 2010 to around 4.5 percent,” Grice said.
According to him, the economic upswing would certainly continue while inflation would likely stay low for a while as the BSP is unlikely to be in the next wave of policy tightening. Capital Economics sees inflation coming in at 4.0 percent next year or within the BSP target of between 3.5 percent and 5.5 percent.
The British research firm also sees the peso appreciating to P44 to $1 next year from the current level of P46.6 to $1.