Source: Business World

By: Daryll Edisonn D. Saclag

REMITTANCES enhance the external balance of emerging economies in Asia, including the Philippines, global debt watcher Fitch Ratings said in a report on Friday.

“In Bangladesh, the Philippines, Sri Lanka and Vietnam, remittances are particularly strong relative to their economies. In these countries, the abundance of cheap unskilled labor is turned into a comparative advantage this way; the inflows support income and consumption, and form an important element of the current account balance,” Fitch said in the report.

“The relatively stable character of remittances, illustrated by resilient inflows during the 2007-2008 global financial crisis, generally strengthens the external balances,” it added.

Cash remittances which Filipinos coursed through banks stood at $2.107 billion in September, up 7.9% a year ago.

The latest figure was the highest monthly volume seen since December 2013’s $2.173 billion.

September inflows brought the year-to-date tally to $17.645 billion, up 6.1% from the $12.637 billion registered in the comparable 2013 period.

Remittances, equivalent to around 10% of gross domestic product, support growth by boosting private consumption.

Money sent home by Filipinos abroad reached $22.968 billion last year, 7.4% higher than the $21.391 billion seen in 2012 and exceeded a 5% growth forecast.

The BSP expects inflows to rise again by 5.5% this year, up from an initial forecast of 5%.