MANILA - Remittances from overseas Filipinos may grow 5.1 percent this year after declining 0.8 percent in 2020, according to international financial services company Nomura.
This was after the Bangko Sentral reported that cash remittances from overseas Filipinos grew 4.9 percent to $2.5 billion in March, bringing total remittances in the first quarter to $7.6 billion, an increase of 2.6 percent.
Nomura however clarified that the 5.1 increase partly reflects low base effects and still implies a contraction of 1.3 percent in real terms.
The company added that in local currency and inflation-adjusted terms, it estimates that “real” remittances growth was a much weaker -4.2 percent in March, picking up only slightly from -4.7 percent in February.
"This underlying weakness is consistent with disappointing private consumption growth in the Q1 GDP data. It also indicates that the support from remittances for household spending remains weak," Nomura said.
The company added that the outlook for remittances is still uncertain.
"While some host countries like the US are recovering, worker deployments from the Philippines may be slow to recover due to the local Covid situation and the latest border restrictions in Taiwan and Singapore may pose additional headwinds in the near term," Nomura said.
The Philippines is one of the largest recipients of remittances, which power domestic consumption, which is around three-quarters of the economy.