SB Equities Inc. said it expects remittances to hit $31 billion this year, up 4 percent from last year.
The stock brokerage firm said this is positive news for household consumption which is a big contributor to economic growth.
“Remittance gains coupled with rising imports could lead to small current account surplus and weaker peso by yearend,” said SB Equities.
It pegs the peso exchange rate vis-a-vis the dollar at 49.50.
The Bangko Sentral ng Pilipinas last week reported April remittances hit $2.3 billion, up 12.7 percent.
“The expansion followed improving economic prospects in some host economies, with looser curbs, business reopenings, and recovering trade leading to the increase in receipts from both land-based workers by 15.2 percent to $1.7 billion and sea-based workers by 4.9 percent to $526 million,” SB Equities said.
This resulted to the country’s year-to-date cash remittances to hit $9.8 billion, with the United States registering the highest share overall in terms of country source (40.3 percent), followed by Singapore, Saudi Arabia, Japan, the United Kingdom (UK), the United Arab Emirates (UAE), Canada, South Korea, Qatar, and Taiwan.
“Combined remittances from these countries accounted for 78.1 percent of total cash remittances for the first four months of the year, and we see upsides from an improving US economy while rising oil prices should benefit those in Saudi Arabia and the UAE,” SB Equities said.
“However, downside risks remain with the spread of newer variants of COVID-19 (new coronavirus disease 2019) which has already compelled countries such as the UK and Singapore to either lengthen or reimpose tighter community quarantine curbs,” it added.
