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THE
money sent home by more than 8 million overseas
Filipinos, also known as OFWs, may reprise the
growth-boosting role played last year that helped
fortify the Philippines against negative developments in
the external sector, the Bangko Sentral ng Pilipinas
said Friday.
Estimated to reach $16 billion this year, remittances
will likely fuel “personal consumption [and act] as
counterforce [against] slower growth” because of a slump
in the global economy, deputy BSP Governor Diwa
Guinigundo said.
Last
year, $14.4 billion worth of remittances were coursed
through banks.
In the
first four months of the year $4 billion were sent to
the Philippines, up more than 13 percent from a year
earlier.
Private-
as well as public-sector consumption activities in 2007
helped fuel the gross domestic product to a 30-year high
of 7.3 percent, Guinigundo said.
He put
his faith in the “resiliency of domestic consumption and
in the remittances of overseas Filipinos” as factors
helping push the economy forward this year no matter the
volatility in financial markets around the world.
He also
said the country’s balance of payments (BOP), one of a
number of factors ensuring continued growth this year,
will remain in a state of surplus of around $3.4
billion.
“This
means the
Philippines’
external position will continue to support a stable
exchange rate,” he said.
While
the current-account portion of the BOP may be affected
by slower trade activities this year, the capital, and
financial-account portion of the balance might offset
those changes, Guinigundo said.
Manila’s
debt ratio averaging 78.2 percent of GDP in 2004 is now
down to 55.8 percent of GDP at end-2007, and its
external debts, averaging 63 percent in 2004, has gone
down to only 38 percent of GDP last year, he added.
The
improving debt ratios provide the economy with
additional buffer from the impact of volatile capital
flows.
In
addition, Guinigundo said the more robust financial
system will help provide opportunities for growth and
act as buffer against uncertain capital flows.
Capital,
assets and loans outstanding of banks have been moving
up the past five years, allowing credit opportunities
that would not otherwise be available, he added.
The
country’s gross international reserves, last seen at
$36.7 billion, were to provide more than six months’
worth of cover for the importation of goods and
services.
The
reserves at this level allow for inexpensive cost of
borrowings abroad, Guinigundo said. |
