Remittances at $2.3 billion in November

According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest NewsBriefs, a regular publication produced by IDEA, Inc. personal remittances sent by overseas Filipino workers stood at USD2.286 billion in November 2013, posting a 9.5 percent increase from the levels recorded in the same period in 2012. This brings the amount of personal remittances from the first eleven months of 2013 to USD22.738 billion which is 7.1 percent higher than levels recorded in comparative periods.

Per IDEA, growth was driven by the 5.5 percent increase in remittances from land-based workers with work contracts at least one year. Remittances from sea-based workers and land-based workers with short term contracts also rose by 8.2 percent. Meanwhile, cash remittances coursed through banks totaled USD2.063 billion, marking a 7.5 percent annual growth. The U.S., Saudi Arabia, the United Kingdom, the United Arab Emirates, Singapore, Canada and Japan were among the country's largest sources of cash remittances. Aside from these, the central bank attributed continuous increase in remittance flows to steady deployment of overseas Filipino workers. According to the Philippine Overseas Employment Association (POEA), job orders for the first eleven months of 2013 amounted to 731,254.

According to the same published report, the government has capped the national budget for 2015 to PhP2.606 trillion, 15 percent higher than the PhP2.265 trillion allocated for this year. Higher expenditure for 2015 aims to support a gross domestic product (GDP) growth of 7 to 8 percent, higher than this year's 6.5- to 7.5-percent target. The 2015 spending plan also aims for inclusive development by encouraging equalization of opportunities, poverty reduction and similar goals. As such, the government seeks to expand provision of social services, housing, education, health services and infrastructure.

Likewise, monetary officials estimate inflation to change in 2014 and 2015 in response to higher prices of basic commodities. Currently, inflation forecasts are at 4.5 percent in 2014 and 3.5 percent for 2015. Officials plan to change this to reflect postponed rate hikes from Manila Electric Co. (Meralco) and higher oil charges. Prices however are expected to normalize in 2015, resulting in lower forecasts for the said period.

Also, the Singapore-based DBS stated that the Bangko Sentral ng Pilipinas (BSP) may reverse the repurchasing rate in the second half of 2014. Overnight borrowing rate is expected to increase by 25 basis points (bsp) to 3.75 percent and by another 25 bsp during the fourth quarter this year. Estimates were influenced by the small expected effect of the damages from the recent typhoon on growth.

Lastly, fourth quarter results from a report of the Social Weather Stations (SWS) showed that 11.8 million households (which made up 55 percent of their respondents) classified themselves as poor. This figure was 50 percent higher than levels recorded in the previous month. Food poverty also rose to 8.8 million households. The increase in self-rated poverty and food poverty was attributed to increases in all areas except for Mindanao, which recorded a two-point decrease in self-rated poverty to 59 percent. According to the SWS, the self-poverty threshold remained sluggish despite inflation, resulting in lower living standards for the Filipinos, according to the researchers of IDEA.

Editor's Note: For comments, rejoinders and questions on credit and collection matters, Mr. Ed F. Limtingco can be reached at [email protected].