MANILA, Philippines - First Metro Investment Corp. (FMIC) has retained its growth forecast for full year cash remittances at four to five percent on the back of strong global demand for Filipino workers in other countries.
According to the latest issue of The Market Call, a joint monthly publication of FMIC and the University of Asia and the Pacific (UA&P), the level of remittances continued to be buoyant with dollar and peso values posting above year-to-date level growth rates.
The announcement by the US Federal Reserve late May of a possible fourth round of quantitative easing – the practice of buying $85 billion in US Treasury and mortgage bonds a month – later this year spooked portfolio investors and forced many to reduce exposure in emerging markets and risky assets.
This translated into the highest trading volatility for the peso for the year as it ranged from 41.91 to 43.89 or a 3.9 percent depreciation of the peso-dollar exchange rate to an average of 42.91 in June.
This was a reversal of a 0.4 percent rise of the peso in May that brought it to its highest level since January 2012.
FMIC-UAP expressed confidence that remittances would remain robust due to sustained strong demand for skilled and professional Filipino workers.
Market Call cited data from the Philippine Overseas Employment Administration (POEA) that showed the number of Filipinos who got their overseas job orders approved from January to May this year remained significant at 367,738.
More than 30 percent of the approved job orders were intended largely for service, production, and professional, technical and related personnel in Middle East and East Asian countries.
According to Market Call, the expansion of the country’s financial institutions in the international market likewise resulted in the rise in OFW remittances.
Cash sent by overseas-based Filipinos amounted to P1.87 billion in May, the highest level since December 2012. The amount was 5.3 percent higher than the same month in 2012.
Remittances from more than 10 million Filipinos living overseas largely fuel household consumption and plays a crucial role in the economy’s growth.
Cash remittances have helped boost the nations foreign exchange reserves, which stood at $81.64 billion as of June.
The Philippines is the fourth-largest recipient of remittances from overseas workers in the world after India, China and Mexico.