By Joann Santiago
MANILA, March 16 (PNA) — Growth of remittance inflows to the Philippines posted its six-year low of 0.5 percent year-on-year in January 2015 but Barclays said this is not a cause for concern.
Data released by the Bangko Sentral ng Pilipinas (BSP) Monday showed that remittances in the first month of this year rose 0.2 percent year-on-year to USD 2.01 billion from year-ago’s USD 2 billion but it is lower than month-ago’s USD 2.6 billion.
In a research note, the investment bank attributed this to three additional public holidays in the first month of the year when Pope Francis visited the country from January 15-19 “which led to bank closures during the period.”
”There is also likely to be some payback in the data from the strength in December, when remittances rose 3.8 percent month-on-month (2014 average: +0.5 percent),” it said.
The report also cited that weaker growth of remittance inflows last January is consistent with other data during the month such as exports “which were also negatively impacted by the additional public holidays.”
”As such, we would not read too much into the unusual weakness of this month’s data, as we are likely to see a recovery in February,” it said.
With the expected recovery of remittance inflows among others, Barclays maintained its forecast that the BSP will maintain its current policy rates at present levels within the first half of the year.
”Indeed, over the weekend BSP Governor (Amando) Tetangco (Jr.) reiterated that current conditions do not warrant additional stimulus, given robust domestic demand,” it said.
”We continue to expect the next policy move to be a 25 bp (basis point) hike, likely in Q4 15,” it added.
To date, the BSP’s overnight borrowing or reverse repurchase (RRP) rate is at four percent and the overnight lending or repurchase (RP) rate is at six percent.
It was hiked by a total of 50 basis points in 2014. (PNA)