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Remittance growth seen faster in 2014

By Julito G. Rada | Jan. 14, 2014 at 12:01am [ manilastandardtoday.com ]

Money sent home by Filipinos working overseas is expected to grow faster in 2014, with the rebound of the global economy and following the onslaught of super typhoon Yolanda in November, British bank Standard Chartered said in a report Monday.

“We expect remittance growth to accelerate in 2014 from the 6-percent print in 10M [10 months of] 2013. Global growth is expected to improve to 3.5 percent in 2014 from 2.7 percent in 2013, and it is likely that the Philippines will benefit from increased remittance inflows from two of its major sources—the US and Europe,” Standard Chartered said.

Data from the Bangko Sentral showed cash remittances rose 6 percent to $18.5 billion in the first 10 months of 2013 from $17.5 billion a year ago.

“Our models show a significantly strong relationship between nominal GDP growth and remittance growth from most countries, indicating that higher GDP growth will boost the income and remittance levels of overseas Filipinos. Along with near-term increased inflows following typhoon Haiyan [Yolanda], we expect an increase of 2 to 2.5 percent in remittance growth in 2014,” it said.

The bank said the sustained remittance growth would support domestic consumption.

Standard Chartered said the growth in remittances from Europe accelerated to 16.7 percent year-on-year in the first 10 months, much higher than the 0.3-percent increase in 2012.

Remittances from the Middle East also grew 24.8 percent during the 10-month period, faster than the 5.3-percent gain in the same period in 2012.

“US remittance growth was stable [7.8 percent from 7.7 percent], while remittances from Asia dropped [4.5 percent from 12.7 percent]. We attribute slower remittance growth in Asia to Japan and South Korea,” the bank said.

Standard Chartered said remittance inflow growth lagged GDP growth in recent years. It said the Philippines was moving from being a consumption-led economy to one also driven by domestic investment. Julito G. Rada
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