Bloomberg News

Philippine Remittance Growth Slows, Reduces Spending Support

February 28, 2012

(Updates with comment from economist in fourth paragraph.)

Feb. 15 (Bloomberg) -- Remittances by Philippine citizens abroad increased at a slower pace in December, clouding the outlook for consumer spending and weakening support for growth.

The funds rose 6.2 percent from a year earlier to $1.8 billion, the central bank said in a statement in Manila today. Remittances grew 10.6 percent in November and expanded 7.2 percent in 2011 to $20.1 billion.

Demand for labor overseas is falling as Europe’s debt crisis prompts companies worldwide to reduce jobs. Bangko Sentral ng Pilipinas cut its benchmark interest rate last month, the first reduction since 2009, joining Asian policy makers from Thailand to Indonesia who are lowering borrowing costs to buffer their economies from weakening global demand.

“We may see some slowdown in remittances in the first half of the year because of the impact from weaker economies in Europe and Asia,” Betty Wang, a Hong Kong-based analyst at Standard Chartered Plc., said before the report.

The benchmark Philippine Stock Exchange Composite Index was little changed as of 2:07 p.m. in Manila.

President Benigno Aquino is increasing spending to a record to help boost growth to as much as 8 percent annually. The economy expanded 3.7 percent in the fourth quarter from a year earlier, compared with 3.6 percent in the previous three months.

--With assistance from Clarissa Batino in Manila. Editors: Rina Chandran, Shamim Adam

To contact the reporter on this story: Karl Lester M. Yap in Manila at kyap5@bloomberg.net;

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net


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