Philippines' February remittances recovered at a pace broadly in line with consensus, while the detailed breakdown has not yet been released, it is suspected the continued weakness was driven by ongoing falls in remittances from Europe, likely on the back of currency translation effects amid the sharp EUR depreciation.
Indeed, the Philippine Overseas Employment Administration continues to report strong growth in job orders, suggesting no fall in demand for overseas workers.
"While the weak EUR could continue to weigh on remittances growth, this should ultimately prove transitory. However, the drop in remittance flows from Europe (alongside other regions with weaker currencies, such as Australia and Japan) could pose some headwinds for private consumption growth this year", notes Barclays in a report on Wednesday.
