Remittances from overseas Filipino workers (OFWs) will continue to support the Philippine economy despite concerns over high inflation and potential economic changes under the incoming leadership of US President-elect Donald Trump, according to Security Bank Corporation’s chief economist.
“We think the US economy next year will still be in positive shape and analysts expect a similar inflation trend,” Angelo Taningco said.
Taningco said the Philippine economy would remain resilient, with manageable inflation, and noted that it is unlikely the peso-dollar exchange rate will reach 60:1.
“We anticipate that in the last two months of the year, the peso will show historical strength due to remittance inflows during the holiday season,” he explained.
Despite concerns raised by US economist Larry Summers in a CNN report, which warned that if President-elect Trump fails to fulfill his campaign promises, commodity prices in America could skyrocket, Taningco expressed optimism about remittance flows.
Trump had indicated he was inclined to reduce taxes, increase tariffs, deport undocumented workers, and exert influence over the Federal Reserve if he defeated Vice President Kamala Harris.
According to the Bangko Sentral ng Pilipinas (BSP), OFW remittances increased by 3.3 percent to $3.34 billion in September 2024, up from $3.23 billion in September 2023.
The growth in remittances was driven by higher remittances from land-based workers with one-year or more contracts and from both land- and sea-based workers with contracts of less than one year.
Cumulative remittances for January to September 2024 also grew by 3.0 percent, reaching $28.07 billion, compared to $27.24 billion in the same period of 2023.