Cash remittances to stay positive – HSBC
Banking giant HSBC believes that cash transfers by Filipinos working abroad are gaining momentum as growth was likely sustained in May.
“We expect remittances to rise 7.5 percent month-on-month and 9.2 percent year-on-year in May as overseas transfers begin to recover after a slow start to the year,” HSBC said in a report released over the weekend.
HSBC’s forecast is higher than the 5.5 percent recorded a year earlier but lower than the April’s 12.7-percent expansion in cash remittances, to $2.347 billion, that was a rebound from March’s 9.8-percent decline.
Official May remittance data is scheduled to be released today by the Bangko Sentral ng Pilipinas.
“Remittances growth has been robust across regions with the exception of the Middle East, where remittances have declined on a yearly basis since the beginning of the year due partly to restrictions on overseas Filipino workers’ deployment to Kuwait at the start of the year,” HSBC pointed out.
The primary contributors to growth in remittances was the United States with a 4.2 percentage points contribution to April’s 12.7 percent growth, followed by Canada with 1.9 percentage points and Singapore with 1.0 percentage points.
HSBC said it expected cash remittances “to recover toward the end of the year now that the [Kuwait deployment] ban has been lifted and for remittances growth to remain broadly in line with its historical trend of 5-6 percent.”
In February, President Rodrigo Duterte ordered a total ban on the deployment of Filipino workers to Kuwait following the killing of domestic helper Joanna Demafelis, whose body was found in a freezer.
The ban was fully lifted in May after the two nations forged a deal to protect Filipino migrant workers in the Gulf state.
Cash remittances totalled $31.3 billion in 2017, 5.3 percent higher compared to the prior year and also topping the Bangko Sentral’s 4.0-percent forecast.
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