Remittances from overseas Filipino workers’ (OFWs) will have continued modest growth, an economist forecasted, citing that beneficiaries need to cope up with the higher spending caused by elevated inflation.
On Monday, the Bangko Sentral ng Pilipinas (BSP) reported the 3 percent year-on-year rise of remittances to $2.67 billion in March 2023, slower than the 3.2 percent growth during the same month last year.
In a report, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort partly attributed the slower remittance growth to the impact of possible recession in the United States that weighs on employment of some workers, the higher inflation rate even in countries were the OFWs are based, and the weaker Philippine peso.
Ricafort said the depreciation of the local currency against the US dollar “partly reduced the need to send more OFW remittances due to higher conversion rate for the US dollar vs. the Philippine peso.”
However, he said the need to send funds to the remittance beneficiaries will continue to drive its expansion not only because of higher cost of living because of inflation, but also due to the normalization of spending after the economy has been reopened.
Ricafort said while the school year has been adjusted, with the opening in most schools moved from June to August, OFWs will still continue to send funds for education-related expenses, thus this will remain among the drivers of remittance inflows.
CURRENTPH NEWS SERVICE