By Lawrence Agcaoili

The Bangko Sentral expects remittances of migrant Filipino workers to stay flat at $16.4 billion this year due to global recession after expanding nearly 14 percent last year.

?Given the slowdown in spending, we need to be conservative in the estimate in remittances,? Bangko Sentral Gov. Amando Tetangco Jr. told reporters at the sidelines of an economic briefing yesterday in Makati City.

The central bank, which earlier saw remittances growing by 6 percent to 9 percent this year, adjusted its forecast as major economies started to contract this year.

?There is a very real danger that the global economy would weaken more and the Philippines has to face this. We might be an island of calm but we are at risk of a negative feedback loop if credit markets freeze up and economic activities grind to a halt,? he said.

Tetangco said remittances from migrant Filipino workers would continue to provide a significant source of foreign exchange, with monthly inflows averaging between $1.3 billion and $1.4 billion.

Data showed that remittances from Filipinos working abroad rose 13.7 percent to $16.43 billion last year from $14.45 billion in 2007 as the number of Filipinos deployed abroad rose considerably by 27.8 percent to 1.376 million from 1.077 million.

The slack in remittances, Tetangco said, would result in a decline in the projected foreign exchange reserves of the country to at least $37.5 billion this year from the original forecast of $39 billion.

With the downscaling of the projected reserves, the government also revised its projected balance of payments position from a surplus of $500 million to $700 million because of lower oil prices.

Economic managers, however, expect exports to contract 8 percent and imports by 10 percent this year. They also scaled down the projected price of oil to a range of $45 to $75 per barrel.

The central bank said lower remittances would result in gross international reserves of between $37.5 billion and $38.5 billion, slightly lower than the earlier forecast of $39 billion to $40 billion.

The gross international reserves consist of holdings in gold, dollars and other foreign currencies and foreign investment of the Bangko Sentral. The balance of payment position is the net of all external payments for debt servicing and imports and earnings from exports, loans and other earnings.

The central bank said the BoP yielded a huge surplus of $1.735 billion in January while the country?s gross international reserves stood at $39.6 billion at the end of the month.