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Alba Iulia
Friday, December 4, 2020

HSBC exec sees little impact of Brexit on PHL remittances

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By Joann Santiago

MANILA, June 27 (PNA) – – An official of banking giant HSBC is confident that Brexit will not greatly affect remittance inflows to the Philippines since the possible decline of inflows from UK can be countered by the strengthening of the greenback and its impact on the peso value of remittances.

In a briefing Monday, Herald van den Linde, head of HSBC’s Equity Strategy for Asia Pacific, said the bank foresaw a lower growth for UK given the developments in global economy.

And with the eventual exit of the UK from the 28-country economic bloc, Linde said this would have some impact on the UK economy.

However, the projected slowdown in UK is seen to benefit the US dollar and other currencies.

UK accounts for about 5.6 percent of money sent by overseas Filipinos in 2015.

Linde said the Brexit would have little effect on remittances to the Philippines because of the play in the strength of currencies, citing the higher value of US remittances.

“On a net, in peso terms, there will be very small impact or none at all because what you’re losing from another country, you will be getting from another country,” he said.

Linde was also positive on the domestic equities market, citing that macroeconomic fundamentals remained strong and a plus to companies unlike in other economies.

Fan Cheuk Wan, HSBC Managing Director and head of investment strategy in Asia, during the same briefing, said markets continued to price in greater volatility because of the Brexit, thus, markets would closely monitor developments.

She said there were camps that were also on the lookout on who would follow the UK in its bid to exit from EU.

“Tensions on who would remain is one key focus of the market,” she said.

Fan said they remained optimistic on emerging Asian economies because these had proven their resiliency.

“Emerging market central banks still have ample ammunition and remain cautious,” she said, adding their rate cut forecast for several countries such as China, India, Australia, and New Zealand.

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