REMITTANCES to the Philippines reached US$28 billion in 2014, making the country the third largest remittance recipient in the world, a report from the World Bank (WB) showed.
The country is preceded only by India, which received remittances of $70 billion, and China, $64 billion. Mexico and Nigeria followed the Philippines, having received $25 billion and $21 billion, respectively.
Total remittances in 2014 reached $583 billion, representing a 4.7 percent growth from 2013.
“This (total remittances) is more than double the ODA (official development assistance) in the world… With new thinking, these mega-flows can be leveraged to finance development and infrastructure projects,” said the bank’s chief economist and senior vice president Kaushik Basu.
In addition, World Bank lead economist for migration and remittances Dilip Ratha said she hopes that the remittances in the Philippines could be used to finance “community development programs” that would fulfill its post-2015 development goals. She also envisioned developments in other developing countries like India, Nigeria, and Pakistan, to pour these remittances to infrastructure projects.
Some projects in the country funded by the World Bank include the Cebu Bus Rapid Transit (BRT), the Philippine Rural Development Project, and the Metro Manila Flood Management Project.
The bank, in its website, said the Philippines’ portfolio amounted to US$2.9 billion for 18 active projects as of January last year.
Sectors benefiting from bank-supported projects cover infrastructure, social protection, health, basic education, rural development and environment.
A country’s remittances, according to World Bank, can be used as collateral to facilitate international borrowings by national banks in developing countries.
Remittances can also facilitate access to international capital markets by improving sovereign ratings and debt sustainability of the recipient country.
For this year, global remittances are projected to grow by 0.4 percent, the slowest growth rate since the global financial crisis in 2008 and 2008. In 2015,
total remittances are expected to reach $586 billion.
“The slowdown in the growth of remittances this year will affect most developing countries…The positive impact of an economic recovery in the US will be partially offset by continued weakness in the Euro area, the impact of lower oil prices on the Russian economy, the strengthening of the US dollar, and tighter immigration controls in many remittance source countries,” the report said.
Slowdown seen in 2015
For East Asia and the Pacific, the World Bank said the growth will also be slower. From an estimated 7.6 percent growth in 2014, growth this year is seen to hit 2.8 percent.
Remittances in these regions, where the Philippines belongs, are weighed down by the sluggish growth prospects in the Euro area and weak values of the euro, the Japanese yen and other source-countries against the US dollar.
While this might be the case, the World Bank’s overall outlook for East Asia and the Pacific regions remains “favorable.”
“Overall, the outlook for the region remains favorable, as workers continue to go overseas with remittances expected to grow to $130 billion in 2016 and $135 billion in 2017,” it projected.
A report by the Bangko Sentral ng Pilipinas, released in February 2015, said that the cash and non-cash remittances reached $26.924 billion at the end of 2014.
This represents a 6.2 percent increase from the $25.351 billion in remittances in 2013.
Citing data from the Philippine Overseas Employment Administration, the BSP said 1.6 million Filipinos were deployed last year, while job orders increased by 10.7 percent to 878,609.
The United States, Saudi Arabia, the United Arab Emirates, United Kingdom, Singapore, Japan, Hong Kong and Canada are the top countries where Filipinos work or migrate.