The Bangko Sentral ng Pilipinas (BSP) has revised its remittance forecast upwards to a growth of eight percent this year, Governor Amando M. Tetangco Jr. said over the weekend.

In dollar terms, remittances are expected to amount to $18.7 billion this year from $17.3 billion at the end of 2009. The previous projection was six percent or $18.35 billion.

Tetangco also said that they are still finalizing readjusted forecasts for balance of payments (BOP), dollar reserves, foreign direct investments, foreign portfolio investments, and exports/imports.

BSP's current BOP goal is $4 billion surplus for this year, $47 billion for dollar stock and $1.7 billion for FDIs.

The inter-agency Development Budget Coordinating Committee has set the exports and imports growth target of 7 percent to 9 percent, and 15 percent, respectively, for 2010.

As for portfolio funds, the central bank has yet to announce "hot money" forecast after registering less than $400 million last year when the projection was $3 billion.

In the first two months, overseas Filipinos remittances totaled $2.78 billion, up 7.75 percent year-on-year. Fund inflows amounted to $1.4 billion for the single month.

The major sources of remittances were US, Canada, Saudi Arabia, Japan, United Kingdom, Singapore, United Arab Emirates, and Italy.

Remittances from these countries accounted for 82 percent of the total inflows.

Tetangco said last week that 11 banks including Bank of the Philippine Islands, Banco de Oro Unibank, Metropolitan Bank and Trust Co., Banco de Oro Unibank, Rizal Commercial Banking Corp. and China Banking Corp. will be slashing remittance charges to below P100 per transaction in the second quarter.

These banks are using the BSP’s real time gross settlement, of which fees will be reduced by 10x in the next weeks. BSP Deputy Governor Armando L. Suratos said that banks are "close" to finalizing procedure for the reduced charges. "(The) test of the IT system (will be done) this week. The reduced rates will take effect thereafter."

The BSP has been encouraging Filipino migrant workers to send funds through banks because it is cheaper and safer than door-to-door. Tetangco said the wider access to expanded money transfer services helped in the growth of remittances in the last five years. Remittances boost BOP and economic growth.

The Philippines official GDP forecast for 2010 is still 2.6 percent to 3.6 percent. The projections are fairly conservative compared to the World Bank’s flat growth of 3.5 percent and the Asian Development Bank’s 3.8 percent.