Filipino workers sending more money home

Manila: Remittances sent home by Philippine citizens abroad rose at the fastest pace in eight months in August as demand for Filipino workers held up, boosting the nation's foreign reserves and the peso.

The funds increased 9.8 per cent from a year earlier to $1.5 billion (Dh5.5 billion), the central bank said in a statement in Manila yesterday. Remittances grew 8.2 per cent in July.

Capital flows to Asia have increased as the region's economic growth lures investments while exports rise, prompting some policymakers to sell their own currencies to curb appreciation. The Philippine peso surged to a 28-month high Thursday and the nation's foreign reserves climbed to a record last month.

"Strong remittances and other channels of capital inflows certainly have put upward pressures on the peso," Sherman Chan, a Hong Kong-based economist at HSBC Holdings, said before the report. Funds sent home by citizens overseas have been held up by demand for workers from the Middle East and Asia, and should show "solid growth in the near term," she said.

The peso was little changed yesterday. The remittance report was released after markets closed. The currency has gained more than 7 per cent in the past three months.

Philippine reserves reached $53.5 billion at the end of September, rising $3.6 billion from the previous month.

The Philippine central bank is "looking" to further relax rules that will "liberalise" foreign-currency "outflows" and help stem gains in the peso, Governor Amando Tetangco said in an emailed reply to questions yesterday.

"The regulatory environment remains appropriate, but we are constantly reviewing this for opportunities to fine tune," he said.