'Within target' inflation to preserve consumer spending power of OFWs

Growth in remittances from overseas Filipino workers (OFWs)—forecast this year to slow down to 5 percent from 7.2 percent in 2011—may “not necessarily” lead to weaker consumer spending, a ranking official of the Bangko Sentral ng Pilipinas (BSP) said Friday.   “You have inflation that we expect to be within target for this year and next year, and this helps keep purchasing power of consumers,” BSP Deputy Governor Diwa Guinigundo said in an interview with reporters.   He also said that “any moderation in terms of the demand in Europe or the US will somehow offset or neutralize by increased demand in new markets for OFWs maybe in higher demand.”   Last year, remittances totaled at least $20.117 billion—a new record level. The feat was achieved despite the gloom scenarios spawned by various crises on different continents.   When converted to pesos using the P43.31 to US$1.00 average for all of 2011, those remittances would amount to roughly P871.27 billion, which is about 12.4 percent of the P7.14 trillion consumer spending Filipino households unleashed last year.   According to the 2010 Survey of Overseas Filipinos, OFWs send home about 73.7 percent of their earnings through the banks. Using that percentage, the P871.27 billion remitted through formal channels does not yet account for remittance sent through other means, in kind, and brought home personally. — ELR, GMA News