Philippine's remittances recovered further in March, better than consensus and even our above-consensus forecast. The rebound represents a further recovery from the weakness seen in January, which was likely affected by three additional public holidays related to the Pope's state visit. Remittances remain below the recent peak reached in December on a seasonally adjusted basis.
While the detailed breakdown has not yet been released, flows from Europe likely remained weak on the back of currency translation effects amid the sharp EUR depreciation. However, the Philippine Overseas Employment Administration continues to report growth in job orders, suggesting demand for overseas workers remains strong.
"As such, while the weak EUR could continue to weigh on remittances growth, this is to ultimately prove transitory. However, the drop in remittance flowsfrom Europe (alongside other regions with weaker currencies) could continue to pose some headwinds for overall remittances growth this year", notes Barcalys.
