Remittances' decline opens PHL to global headwinds

Despite the dollar-for-dollar gains in the past five years, remittances from overseas Filipinos have been slowing down from 2010 to 2015 in percentage terms, latest data from the Bangko Sentral ng Pilipinas (BSP) revealed.
 
Personal remittances grew to $25.249 billion in January to November 2015, up by 3.4 percent from $24.410 billion a year earlier.
 
However, the remittance numbers in the first 11 months of 2015 – the latest data released by the central bank – showed the growth rate actually declined by 46 percent from 6.3 percent in January to November 2014.
 
Cash remittances grew by 3.6 percent to $22.830 billion in the eleven-month period of 2015 from $22.031 billion in the same comparable period in 2014.
 
Central bank data showed that cash remittance grew by 5.9 percent in January to November 2014 from the first 11 months of 2013.
 
This means that growth rate of cash remittances in the first 11 months of 2015-2014, versus 2014-2013, actually declined by nearly  40 percent.
 
Cash remittances are money transfers coursed through banks, while personal remittances are the sum of transfers in cash or in kind sent via informal channels.

Given the Philippines' current account sustainability, think tank HSBC Global Research said that the decline in remittance growth rates is "natural."

The current account is a detailed transaction of the country with the rest of the world. It indicates the movement of funds from the trade of goods and services as well as the transfer of income to and from the Philippines.

"Although OFW deployment should remain sticky and remittances will continue to grow, it is natural and perhaps inevitable that the growth rates peter out from a high base, assuming that the amount of OFWs doesn't increase dramatically," it said.

According to HSBC, with the continued growth of the country's GDP compared to the past decades, the remittances share will decrease, possibly cause the country to be "slightly more exposed to global cyclical currents." – with Jannielyn Bigtas/Jon Viktor Cabuenas/VS, GMA News