Goldman Sachs sees
remittances growing by 11%
Due to improving global economic conditions and seasonal inflows, investment bank Goldman Sachs yesterday said money sent home by overseas Filipinos may surprise a bit more and possibly grow by double-digits.
In Goldman Sachs latest Asia Economic Data, analysts said growth in overseas remittances "(will) accelerate over the next few months and reach 11 percent year-on-year by December."
They said that this could be "a lagged response to improving global growth conditions, an up-tick in oil prices improving the macro environment in the Middle East, and the Christmas season inflows acting as a catalyst."
Goldman Sachs also said that "the October balance of payment surplus at $896 million, much higher than the $502 million in September, (was) largely due to strong remittance inflows."
"At over 10 percent of GDP, growing remittances are likely to give a push to private consumption and GDP growth, offsetting some of the impact from the recent typhoon-related destruction to agricultural production," Goldman Sachs said.
Goldman Sachs said that with the continued resilience of remittances, it expects remittances to become increasingly more supportive of the local currency over the next 12 months.
"Our 3, 6 and 12-month dollar-peso targets are at 45.8, 45.5 and 44.5 respectively," Goldman Sachs said.
Last week, the Bangko Sentral ng Pilipinas (BSP) reported that money sent home by overseas Filipinos coursed through banks rose significantly to $1.4 billion in September 2009, a year-on-year increment of 8.6 percent.
As a result, cumulative remittances for the nine-month period increased by 4.2 percent to $12.8 billion.
BSP Gov. Amando Tetangco said remittances from both sea-based and land-based workers expanded during the first three quarters of this year.
"Steady remittance flows were shored up by the continued strong global demand for professional and skilled Filipino workers and the wider access of overseas Filipino workers and their beneficiaries to a broader array of financial products and services," Tetangco said.
The central bank chief said these factors support the optimistic outlook for the sustained growth in remittances through the rest of 2009.
BSP said that the deployment of Filipino workers abroad is anticipated to increase given the continuing hiring arrangements between the Philippines with existing and non-traditional labor markets as well as the forthcoming relocation of US military facilities from Japan to Guam over the course of the next five years.
The Department of Labor and Employment (DOLE) earlier reported that a top-level Guam Senate team visited the country in September to finalize details on the hiring of Filipino skilled workers beginning July 2010.
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