MANILA — A Singapore-based DBS bank said that the robust remittance inflows from Filipinos outside the country will continue to fuel the country’s balance of payments position and private consumption.
“Even if (it) has slowed, at the current pace, OFW remittances are still likely to reach $24 billion by year-end,” DBS said in a research note.
This prediction is somehow similar to that of Bangko Sentral ng Pilinas which made a forecast that remittances will be growing by five percent this year over the $22.968 billion in 2013.
It also sees a BOP surplus of $3 billion, with a current account surplus of $10.4 billion.
Last year the country’s BOP position settled at a surplus of of $5.085 billion with a current account surplus summing up to $9.4 billion.
The surplus was caused by the increase in the remittances from OFW and the increase in the profits of the business process outsourcing sector.
DBS also added that OFW remittances will continue driving the current account component of the country’s balance of payments position.
“And not only that, strong OFW remittances will continue to prop up domestic growth.
Remittances which makes up 8.4 percent of the country’s gross domestic product, is an essential factor that drives the domestic consumption.
DBS however pointed out that the country must be aware on the risks it may cause in the prices of goods and services.
“Note that while private consumption is resilient, there are some risks on the inflationary front,” DBS said.