Philippines: Positive prospects seen for OFW remittances

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Remittances from overseas Filipinos are expected to continue growing as many developed economies bounce back, according to think tank GlobalSource Partners.

'The prospects for OFW (overseas Filipino worker) remittances appear promising given the recovery of many advanced economies,' GlobalSource country analysts Diwa Guinigundo and Wilhelmina Manalac said in a report.

Citing the International Monetary Fund's April 2024 World Economic Outlook, they said advanced economies are forecasted to post slight acceleration in growth to 1.7 percent this year from 1.6 percent in 2023.

For 2025, advanced economies are expected to expand at a slightly faster rate of 1.8 percent.

'Many OFWs are domiciled in these economies,' Guinigundo and Manalac said.

They said the reversal of the situation in the advanced economies, however, may be ominous for overseas employment and remittances.

It will also affect both the real sector and the country's external payments position.

Guinigundo and Manalac said the country relies heavily on OFW remittances as a major source of foreign exchange earnings.

OFW remittances also have a considerable contribution to the country's gross domestic product.

With many OFWs working around the world, Guinigundo and Manalac said remittances have provided a natural hedge against specific regional recessions with weak remittance flows from affected areas mitigated by remittances from less affected parts of the world.

They said money sent by OFWs to the Philippines to finance their families' daily expenditures, housing payments, tuition and even expenses for milestone celebrations have also contributed to the steady rise in remittance flows over the years.

Data from the Bangko Sentral ng Pilipinas showed that personal remittances from OFWs rose by 2.9 percent to $18.10 billion in the first half from $17.59 billion in the same period last year.

Personal remittances from OFWs grew by 2.5 percent to $3.21 billion in June alone from $3.13 billion registered in the same month in 2023.