Record remittances fail to shield Philippine peso’s slide from mounting external pressures
Steady inflows from overseas workers are outweighed by higher oil prices, capital outflows, trade gap
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[MANILA] Some US$36 billion of annual remittances from overseas Filipino workers (OFW) have long been a pillar of the Philippines’ finances, providing it with one of its most stable sources of foreign exchange and one of the peso’s most reliable buffers against external shocks.
But that formidable stream is now under pressure. A strengthening US dollar, mounting trade deficits, capital flight and high energy import bills have pushed the peso to record lows, exposing the limits of a source of foreign exchange that has helped cushion the economy through past crises.
These confluence of factors are exposing the fragile underbelly of Asia’s import-dependent economies, analysts said.
