GLOBAL debt watcher Fitch Ratings said remittance inflows in the Philippines are less vulnerable to the slowing growth in Middle East countries because migrant Filipino workers are not solely concentrated in that region.
Fitch said in a report Friday reduced growth and capital spending among oil producers in the Middle East might trim employment opportunities for foreign workers from Asian countries, especially in construction.
It said the risk of lower demand for foreign workers in the Middle East was significant, but has, so far, hardly materialized in the Philippines, Sri Lanka, Bangladesh, Pakistan and Vietnam.
“Remittances as a relatively stable source of foreign-currency receipts generally strengthens the external balances of the receiving country. At the same time, countries whose external accounts depend on remittance inflows would be vulnerable if this source of foreign currency were disrupted,” Fitch said.
“This is especially true if coupled with a high level of worker concentration in certain countries. In this light, Fitch believes Sri Lanka is especially vulnerable to such disruptions, while Pakistan and Bangladesh are also relatively exposed,” Fitch said.
Fitch said remittance inflows in the Philippines, Sri Lanka, Bangladesh, Pakistan and Vietnam were particularly strong relative to the size of their economies. It said the growth of remittance inflows was slowing in some of these countries, but the absolute amount remained large and significant.
Fitch said remittance inflows from workers abroad remained strong in Asia, while dropping significantly in some other regions.
Latest data from Bangko Sentral ng Pilipinas showed that money sent home by migrant Filipinos in February 2016 grew 9.1 percent to $2.11 billion from $1.935 billion a year ago, the fastest in eight months, due mainly to the sustained demand for local skilled workers abroad.
The amount brought cash remittances in the first two months to $4.133 billion, up 6.2 percent from $3.89 billion a year ago.
Most cash remittances came from the United States, Saudi Arabia, United Arab Emirates, Singapore, Hong Kong, the United Kingdom, Canada, Japan and Qatar.
Personal remittances, which include non-cash items, expanded 9 percent in February to $2.33 billion from $2.14 billion on year, also an eight-month high. The figure brought personal remittances in the first two months to $4.56 billion, up 6.1 percent from $4.3 billion a year ago.
The steady deployment of migrant Filipino workers remains a key driver to the growth of remittance inflows. Data from the Philippine Overseas Employment Administration showed 31.6 percent of the 160,277 total job orders were intended to fill in demand for service, production, and professional, technical and related workers in Saudi Arabia, Kuwait, Qatar, Taiwan, and UAE.