MANILA (Reuters) – Remittances to the Philippines could grow 5 percent this year, higher than earlier estimates, as Filipinos overseas send more money home to help their families recover from typhoon wreckage, a senior government official said at the weekend.
Remittances, a driver of consumer spending that fuels more than two-thirds of GDP, have held up well despite the global economic crisis, growing 3.8 percent in the seven months to July from last year.
“(A) 5 percent (growth) is possible,” Augusto Santos, head of the economic planning agency told reporters. “OFWs (overseas Filipino workers) are scattered worldwide and OFWs tend to send more during calamities.”
Santos said the expected global economic recovery would also push up remittance inflows.
He said stronger-than-expected remittance growth this year would likely offset the impact of recent typhoons and allow the Philippines to meet its 0.8-1.8 percent 2009 growth target.
The central bank has officially forecast remittances this year to match the record $16.4 billion inflows in 2008. Central bank governor Amando Tetangco has said he expects 2009 remittances to climb more than 3 percent.
A week of heavy rains has caused more than 5 billion pesos ($107.5 million) damage to crops and infrastructure, according to the national disaster agency.
“We are maintaining growth targets because typhoon damages are being offset by OFW remittances and spending on relief, rehabilitation and reconstruction,” Santos said.
Analysts expect remittances to grow 5.5 percent this year, higher than the International Monetary Fund’s 4 percent estimate.
Source: Reuters India
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