70pct inward remittances channeled into production: cbank

Vietnam now has about 4 million overseas Vietnamese living abroad. They sent back to the country $12 billion in 2014, up $1 billion against the previous year, according to the conference on how overseas Vietnamese can join in the integration and development process of Vietnam.

Previously, remittances mainly focused on real estate sector, securities, and savings as main investment channels, but in the first six months of 2014, 70 percent of remittances were invested in manufacturing and trading, according to the SBV branch in HCMC.

The number of projects registered by overseas Vietnamese in Vietnam has so far reached about 2,000, said the SBV branch.

By the end of last year, SBV and many other local financial institution forecast the amount of inward remittances to Vietnam by the end of this year is expected to rise to $12 billion, a record rate following the trend set in 2011-2013.

During the last 3 years, the amount of inward remittances continued to increase from $9 billion in 2011 to $10 billion in 2012 and $11 billion in 2013.

According to Nguyen Hoang Minh, deputy director of the SBV branch in HCMC, in 2014, Vietnam will continue to be one of the 10 countries receiving the biggest volumes of remittances in the world with the annual growth rate expected to rise 10 percent over last year, reaching around $12.1 billion.

Similarly, the forecast of the research center under the Bank for Investment and Development of Vietnam (BIDV) has also stated that in 2014, inward remittances will increase by about 10 percent year on year.

Vietnam attracted nearly $80.4 billion worth of inbound remittances, an average increase of about 39 percent per year, during the 1991-2103 period, said Dr. Vo Tri Thanh, deputy head of Hanoi-based Central Institute for Economic Management (CIEM) at a conference held in late December 2014 in Hanoi

"Remittances play an important role in economic development and stabilize the macro economy of Vietnam. This is the 2nd largest capital source for Vietnam, larger than the disbursement of the official development assistance (ODA) during the period,” he said.

Vietnam is one of the top remittance-receiving countries in the world, said Patricia Riingen, Western Union’s senior vice president for South and East Asia and Oceania, at the event organized by Western Union in the capital city.

With the flow of inward remittances, the economic growth of the Southeast Asian country has been greatly contributed by Vietnamese people who are living and working in foreign countries as well as their families in the homeland, she added.