REMITTANCES from overseas Filipinos are expected to grow by about 3% in 2024 and 2025, the World Bank (WB) said.
In a report, the bank said remittances to the Philippines, which account for nearly half of the money sent to the East Asia and the Pacific excluding China, are projected at $40 billion in 2024 and $41 billion in 2025.
The growth is expected to be driven by overseas workers in Kuwait, Malaysia, and the United Arab Emirates, where fees are among the lowest of the major deployment countries, the bank added.
The Philippines was the third largest recipient of remittances in 2023 at $39 billion, behind Mexico ($66 billion) and China ($50 billion).
The World Bank described the Philippines’ 2.8% remittance growth as of April as “muted” compared to the 3.7% posted in 2022.
“Tourism recovered to pre-pandemic levels in the Philippines, giving Filipinos domestic employment opportunities as an alternative to emigration, which dampened remittance growth,” it said.
The World Bank said remittance flows to East Asia and the Pacific grew 1.8% in 2023, supported by the Philippines, the largest recipient in the region after China.
“The sustained growth in remittance flows to the Philippines was an outcome of a well-diversified set of host destinations across the world,” it said.
In the four months to April, cash remittances rose 2.8% to $10.782 billion, the Bangko Sentral ng Pilipinas said.
“Dissipating inflationary pressures and interest rates, and enduring strength in the labor markets of the OECD (Organization for Economic Cooperation and Development) countries, are expected to sustain remittance flows to the East Asia and Pacific region,” the bank said.
“The positive outlook for oil prices will support remittance growth from the GCC (Gulf Cooperation Council) countries,” it added.
Downside risks to remittance flows to the region include uncertainty surrounding China’s property market, which could slow economic growth and demand for workers from other East Asian countries, the World Bank said.
Industrial and trade-restrictive policies across Asia and the Group of Twenty countries could weaken demand for manufactured exports, it also said. The attacks on Red Sea shipping may also increase the cost of East Asian exports to Europe.
“Any factor that disrupts global supply chains can dampen demand for East Asian migrant workers and impact remittances,” the World Bank said. — Beatriz Marie D. Cruz
