Remittances to recover in Q2 — Metrobank Research

Money sent home by Filipinos working and living overseas is expected to recover this quarter following a slump in March, to be buoyed by remittances for education purposes, Metropolitan Bank & Trust Co.'s research arm said in a report late Wednesday. 

 

In a section of its latest Weekly Views from the Metro, the bank said: “Growth in remittance flows is expected to be higher in the second quarter amid the start of another school year.”

 

Pauline Revillas, research analyst at Metrobank, said education consumes the bulk of expenses borne by the family of overseas Filipino workers (OFW). 

 

The Bangko Sentral ng Pilipinas reported more than two-thirds of OFW households spend remittances on education, she added. 

 

Cash remittances coursed via banks hit $1.749 billion in March, growing by just 3 percent—the slowest since the 2.8 percent posted in August 2009, latest data showed. 

 

Remittances in the first three months of the year grew 5.6 percent year-on-year to $5.1 billion.

 

“While the first quarter growth is still above the BSP’s 5 percent  growth forecast for the year, remittances have posted a sustained decline in their year-on-year growth rates since the start of the year,” said Revillas. 

 

Remittances grew 8 percent in January and 6 percent in February. 

 

Despite the sustained decline so far, Metrobank does not see a major slowdown in remittance flows this year. 

 

Revillas said “improving prospects in some host countries and the continued deployment of Filipino workers abroad” should continue to shore up remittances. 

 

“However, the slower first quarter growth of remittances could likely result in slower personal consumption spending for the period,” she added. 

 

Still, dampened consumption spending is not seen to curb Philippine output  in the first quarter, as “election spending would likely compensate for this.”

 

In March, Socioeconomic Planning Secretary Arsenio Balisacan said the Philippine economy could have grown between 6 to 7 percent last quarter on the back of private and election spending. [http://www.gmanetwork.com/news/story/300939/economy/finance/gdp-growth-for-first-quarter-in-6-7-range-neda] 

 

Output in the first quarter of 2012 expanded by 6.4 percent, while the full-year GDP was at 6.6 percent. — Siegfrid Alegado/VS, GMA News