AN ECONOMIST attributed the increase of cash remittances from overseas Filipino workers (OFWs) partly to higher inflation rate as recipients needed more funds for their needs.
The Bangko Sentral ng Pilipinas (BSP) reported that remittances sent home by Filipino workers overseas reached USD2.76 billion last January, higher than the USD2.67 billion during the same period last year.
In a commentary on Wednesday, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said higher prices of commodities on account of elevated inflation rate and other spending due to the continued reopening of the economy raised the need for OFWs to send more funds to their beneficiaries.
However, Ricafort said the modest single-digit growth in OFW remittances may be partly attributed to the still elevated global inflation and higher interest rates in recent months that somewhat slowed down the recovery in the global economy.
This also partly weighed on both OFW employment and incomes, especially in host countries, he said.
And although remittances are expected to continue rising in the coming months, Ricafort said downside risks include the possible recession of the US economy and continued increases in interest rates.
These factors, he said, “could still be drags on jobs/employment prospects for OFWs and could also potentially slow down OFW remittances in the coming months.” (PNA)/PN
