THE Bangko Sentral ng Pilipinas (BSP) expressed confidence that the remittances from Filipino migrant workers will continue to support the local economy, amid recent sharp dips in the growth of volume of cash that hit below 1 percent in August.
In a recent media briefing, the BSP Deputy Governor for the Monetary Stability Sector, Diwa C. Guinigundo, said that the recent slowdown in remittances—most evident in the first eight months of this year—is a sign that the remittance business is reaching its so-called maturity stage.
Guinigundo explained that remittances being “more mature” in the cycle means that the previously high-growing foreign-exchange inflows in the country already have a high base through the years of expansion—which makes it hard for more recent growth rates to put up with the previous expansion pace when remittances were still relatively smaller.
He also said that the slowdown may be reflective of the continuing softness that is being experienced in other countries—as the global economy continues to slow and dip into more uncertainty in recent developments.
The diversification of the type of job orders in other countries, meanwhile, is seen to minimize the impact of the slowing global economy to the flow of remittances in the country.
“In the past, we are also saying that OFWs [overseas Filipino workers] are already diversified—less of the unskilled or semiskilled OFWs but more of the professional—and some would even describe them as recession-proof workers,” Guinigundo said, adding that demand for these types of jobs is still robust all over the world.
Thus, Guinigundo reiterated that their growth assumption of 5 percent to 6 percent—which was thought to be modest in recent years—is “appropriate at this point.”
Matching the stronghold of the remittance to the economy, meanwhile, is the receipts from business-process outsourcing—an industry which is seen to have been growing circa 15 percent to 20 percent in recent years, as well as in the years to come.
“You know, as the global economy continues to be weak, the demand for outsourcing will continue—because it will be beneficial for these foreign companies to outsource outsourceable services for them—and demand for Filipino services will continue to grow,” Guinigundo said.
The central bank reported earlier in the week that remittances grew by a meager 0.5 percent in August this year, lower than the 5-percent to 6-percent trend, and brought the total eight-month average growth below target at 4.8 percent.