The huge volume of remittances sent home by Filipinos working abroad and a rise in both short & long-term sources of funding into the nation has largely contributed to the growth of the Philippines’ economy. The country’s economy has set a new record by rising to its highest point in more or less 6 years, all thanks to the Filipinos who send back home remittances after getting jobs overseas.
Since 2013, the surge in remittances has produced a positive effect on the nation’s BOP (Balance of payment): A statement of a nation’s international trade and economic transactions with all the other nations (counting in the inflow and outflow of foreign exchange) in a specific period of time. The solid improvement in the Philippines’ BOP during Jan-Apr 2019 shows that the foreign exchange inflows have been surpassing the outflows since then.
As per the Central Bank of the Republic of the Philippines, during the initial 4 months of 2018, the balance of payments showed a deficit of $1.5bn but registering a surplus of a whopping $4.27bn during the same 4 months of the current calendar year, the country’s balance of payment has set a new benchmark. Purportedly, the international remittances from Filipinos working abroad and both short and long investments into the country have contributed to the $4.27bn BOP surplus in the first 4 months of 2019. This shift from a deficit to surplus is important because, at the end of the previous year, Duterte administration paid a hefty amount of $2.3bn to other countries in order to purchase international goods/services and expand its business. The huge outflow was not good for the country’s economy and hence the surplus recorded in the first quarter of 2019 came as a big relief.
Before 2019, it was back in 2013 when the country’s BOP recorded a surplus of 5bn. A surplus of a thumping $467 M was documented for the month of just April, representing a turnaround from $270 M balance of payment deficit posted in April previous year.
The surplus posted in April 2019 may be attributed to the foreign exchange functioning and revenue from overseas financing of the Central Bank of the Republic of the Philippines, ‘Bangko Sentral ng Pilipinas’ as well as the net foreign currency deposits of the government. This was done in an attempt to counterbalance. The government made heavy international payments in order to fulfill its foreign exchange liabilities during the same month and hence it made an effort to balance out things.
The current figures say that the country’s economy will continue to go strong as the government doesn’t have many foreign exchange commitments to fulfill in 2019. Plus, with money transfer services becoming popular, individuals and companies will rely on them in order to make foreign transactions. Ria Money Transfer is the most reliable service if you need to send money to the Philippines or any other country. The affordable exchange rates, ongoing offers, and low transaction costs make it the best money transfer service out there. Since the rates are so low, sending money using Ria to over 149 countries is a great way to keep the country’s foreign currency outflows low.
The remittances from Filipinos settled abroad is also expected to see a major rise which clearly indicates that the position of Philippines balance of payment will see a flurry of surpluses in the coming years and the country’s economy will witness a massive boom, growth and development.