MANILA -- An economist of ING Bank Manila does not expect the Philippine peso to get enough boost from Overseas Filipino Workers (OFWs) despite "within-target" remittance growth as of May 2018.

The peso closed Tuesday at 53.39 to a US dollar, an improvement from the previous day’s 53.53.

On Monday, the Bangko Sentral ng Pilipinas (BSP) reported the 6.9 percent year-on-year growth of cash remittances last May alone, slower than the previous month’s 12.7 percent expansion but higher than the government’s 4 percent target.

In the first five months this year, cash remittances grew by an average of 4.2 percent, which ING Bank Manila senior economist Joey Cuyegkeng said is a normal growth.

Despite the resilient growth of remittances, the economist forecasts that inflows from Filipinos working overseas will not likely lessen the weakening of the local currency in the near term since the former remains inadequate to finance the country’s trade deficit.

The country has been posting trade deficits as it imports more goods to meet the rising domestic demand.

Data from the Philippine Statistics Authority (PSA) showed that the country’s trade deficit reached USD3.70 billion last May, higher than year-ago’s USD2.51 billion deficit.

Cuyegkeng said the shortfall of remittances to finance the trade deficit last May amounted to USD1.2 billion while it totaled to USD3.9 billion as of end-May this year.

“This shortfall would likely continue and would keep the Philippine peso on the defensive,” he added. (PNA)