Overseas Filipinos’ remittances sustained growth in January — BSP

Money sent home by overseas Filipinos sustained an uptrend in January, a month after the traditionally consumption-heavy Christmas season, data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday showed.

Central bank data showed personal remittances — the sum of transfers sent in cash or in-kind via informal channels — stood at $2.966 billion in January, 2.5% more than the $2.895 billion recorded in the same month in 2021.

“The increase in personal remittances in January was due to remittances sent by land-based workers with work contracts of one year or more, which grew by 2.9% to $2.283 billion from $2.219 billion in the same month last year, and sea- and land-based workers with work contracts of less than one year, which increased by 1.2% to $617 million from $609 million a year ago,” the BSP said.

Likewise, cash remittances, which coursed through formal channels such as banks, grew by a 2.5% year-on-year to $2.668 billion from $2.603 billion recorded in the same month last year.

“The expansion in cash remittances was due to the increase in receipts from land-based and sea-based workers, which rose by 2.9% (to $2.103 billion from $2.044 billion) and 1.2% (to $565 million from $558 million), respectively,” the central bank said.

In an emailed commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that more OFW remittances were sent to the families or dependents in the country, “in view of the fact that the COVID-19 pandemic reduced employment/livelihood/business/economic activities since 2020 as part of the social function/support system since the pandemic started two years ago.”

“Higher inflation would have also prompted/led to increased remittances sent…,” Ricafort said.

The BSP noted that the growth in cash remittances from the United States, Japan, and Singapore contributed largely to the increase in remittances in January.

In terms of country sources, the US registered the highest share of overall remittances at 41.2% in January, followed by Singapore (7.4%), Japan (5.9%), Saudi Arabia (5.9%), the United Kingdom (4.8%), the United Arab Emirates (3.2%), Canada (3.2%), Taiwan (2.7%), Qatar (2.7%), and Malaysia (2.5%).

The combined remittances from these top ten countries accounted for 79.6% of total cash remittances during the period, according to the central bank.

Meanwhile, Ricafort said that “the continued year-on-year growth in OFW remittances has been somewhat defying the pandemic, as some OFWs are economic and medical frontliners, as well as essential workers, in various host countries worldwide, especially those with ageing populations, thereby a sign of resilience/bright spot/green shoots.”

“However, a risk factor is the recent surge in new COVID cases in some host countries for OFWs, leading to some restrictions in travel/flights/mobility that could slow the recovery in the global economy and in OFW remittances,” he said. — RSJ, GMA News