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Money sent home by overseas Filipinos to their families sustained its uptrend in March, but an analyst expects growth to be tempered by inflation heating up in developed economies, according to a report by Philippine Star.
Data released by the Bangko Sentral ng Pilipinas on Monday showed that cash remittances surged 3% year-on-year to $2.67 billion in March.
Remittances expanded 3% to $8 billion in the first quarter compared to a year ago.
Money sent home by overseas Filipinos considered a cornerstone of the consumer-dependent domestic economy, posted its largest cash haul of $32.54 billion in 2022. This was despite being a year removed from the pandemic which crashed the global economy and forced overseas Filipinos to go home in droves because of layoffs and businesses going under.
The year opened with much of the same headwinds, such as a projected global recession, brutal inflation, and expensive borrowing costs that continued to cast a shroud over the global economy.
For 2023, the BSP forecast that cash remittances would expand by 4% on an annual basis.
Domini Velasquez, chief economist at China Banking Corp., attributed the upbeat performance to economic outlooks improving.
“The US looks to be heading with recession now only expected in Q4 and the labor market still robust,” she said in a Viber message.
“Meanwhile, the euro area and the UK are now projected to dodge a recession altogether this year,” Velasquez added.
Data broken down 41.4% of remittances in March came from the United States, while the rest came from the United States, while the rest came from Singapore, Saudi Arabia, Japan, United Kingdom, United Arab Emirates, Canada, Qatar, Taiwan and Hong Kong.
Remittances from land-based workers grew 3.3% on-year to $2.09 billion in March. Sea-based workers sent in a haul of $580 million, rising 1.8% on an annual basis.
Despite this, a slowdown is in the works as Velasquez sees it.
“However, persistently high inflation in Europe, especially in the UK may prevent overseas Filipinos from sending more remittances back to the Philippines and keep remittance growth tepid over the coming months,” she added.
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