OFW remittances hit $2.88B in May

Money sent home by overseas Filipino workers (OFWs) rose by 3.6% in May, its fastest pace in five months, data from the Bangko Sentral ng Pilipinas (BSP) showed.

The BSP on Monday reported that cash remittances coursed through banks grew by 3.6% to $2.58 billion in May from $2.49 billion in the same month a year ago.

The growth in cash remittances was its fastest in five months or since the 3.8% logged in December 2023.

Month on month, remittances inched up by 0.8% from $2.56 billion in April.

“The expansion in cash remittances in May 2024 was due to growth in receipts from both land- and sea-based workers,” the BSP said in a statement.

Remittances from land-based workers jumped by 3.8% to $2.06 billion while money sent home by sea-based workers grew by 2.6% to $519.373 million.

In the January-to-May period, cash remittances increased by 3% to $13.365 billion from $12.981 billion a year ago.

This was also its fastest pace of annual growth in a year or since the 3.1% recorded in May 2023.

“The growth in cash remittances from the United States, Saudi Arabia, and Singapore contributed mainly to the increase in remittances in January-May 2024,” the central bank said.

In the first five months, the United States accounted for 40.9% of total remittances.

This was followed by Singapore (7.2%), Saudi Arabia (6.1%), Japan (5.1%), the United Kingdom (4.7%), the United Arab Emirates (4%), Canada (3.4%), Korea (2.8%), Qatar (2.8%) and Taiwan (2.7%).

“This 3.6% increase (in May), reaching $2.58 billion, suggests a combination of positive factors. Economic growth in key remittance source countries like the US, Saudi Arabia, and Singapore might be putting more money in the pockets of OFWs,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

Mr. Roces said that rising wages of OFWs could also be another factor behind faster remittance growth.

“Finally, favorable exchange rates incentivize sending more money back as it translates to a bigger bump in Philippine pesos received,” he added.

In May, the peso sank to the P58-per-dollar level for the first time since November 2022.

“The continued growth nevertheless is still a good signal for the overall economy as an important growth driver, especially in terms of consumer spending, which accounts for about 74% of the Philippine economy,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Mr. Ricafort also noted there was a seasonal increase in remittances due to the summer holiday.

Meanwhile, personal remittances rose by 3.7% to $2.88 billion during the month from $2.78 billion. This brought personal remittances at end-May to $14.89 billion, higher by 3% from $14.46 billion in the same period a year ago.

“The increase in personal remittances in May 2024 was due to remittances from land-based workers with work contracts of one year or more and sea- and land-based workers with work contracts of less than one year,” the BSP added.

For the coming months, Mr. Ricafort said he expects modest growth in remittances as OFW families “still need to cope up with relatively higher prices locally that would require the sending of more remittances.”

For the first six months of the year, headline inflation averaged 3.5%. This was slightly higher than the central bank’s 3.3% full-year forecast.

Mr. Ricafort also noted there is a seasonal increase in remittances during the July-August period due to the need to pay for school tuition payments.

The central bank expects cash remittances to grow by 3% this year.

Source: Business World

OFW remittances hit $3.05B in March

Overseas Filipino worker (OFW) remittances rebounded to $3.05 trillion in March from nine-month low, Bangko Sentral ng Pilipinas (BSP) data showed on Wednesday.

Overall, or personal, remittances were 2.6 percent higher than the $2.97 billion posted a year earlier and also improved from February's $2.95 trillion, which was the lowest level recorded since May 2023's $2.78 trillion.

"The increase in personal remittances in March 2024 was due to remittances from land-based workers with work contracts of one year or more and sea- and land-based workers with work contracts of less than one year," the BSP said in a statement.

Money sent home via banks alone totaled $2.74 billion, 2.5 percent up from the $2.67 billion recorded in March last year and February's $2.65 trillion.

"The expansion in cash remittances in March 2024 was due to growth in receipts from both land- and sea-based workers," the central bank said.

Growth for both personal and cash remittances, however, were also the slowest so far for the year and since last July's 2.5 percent and June 2023's 2.1 percent, respectively.

Year to date, meanwhile, personal remittances were up 2.8 percent to $9.15 billion, from $8.90 billion a year earlier, while cash remittances rose 2.7 percent to $8.22 billion from $8.0 billion.

The first quarter's cash remittance growth was mainly due to flows from the United States, Saudi Arabia, the United Arab Emirates (UAE) and Singapore, the BSP said.

By country source, the US accounted for the biggest share (41.2 percent), followed by Singapore (7.2 percent), Saudi Arabia (5.9 percent) and Japan (5.0 percent).

Other countries that contributed to total remittances were the United Kingdom (4.4 percent), the UAE (4.3 percent), Canada (3.2 percent), Taiwan (2.8 percent), Qatar (2.8 percent) and Hong Kong (2.5 percent).

Sought for comment, ING Manila Bank senior economist Nicholas Antonio Mapa said the slower remittance growth could be due to foreign exchange fluctuations and lower inflation.

"Despite the miss, OFW remittances remain a stable and dependable source of foreign currency and peso purchasing power for the PHL (Philippine) economy," Mapa added.

He expects overall OFW remittances to grow by 3.0 percent this year.

Rizal Commercial Banking Corp. chief economist Michael Ricafort, meanwhile, said that Filipinos working abroad continued sending money home to help their families cope with high prices.

"[The] risk of economic slowdown or even risk of recession in the US, which is the world's largest economy ... could lead to some job losses and slow down employment opportunities for some OFWs and another offsetting risk factor for the OFW remittances data for the coming months," he added.

Source: Manila Times

Remittances up by 2.7% in January

Cash Remittances from overseas Filipino workers (OFWs) rose by 2.7% year on year in January, the Bangko Sentral ng Pilipinas (BSP) said.

Data from the BSP showed cash remittances coursed through banks increased by 2.7% to $2.836 billion in January from $2.762 billion in the same month last year.   

However, the amount of money sent home by migrant Filipinos was the lowest in two months or since $2.719 billion in November.

Month on month, the growth in cash remittances slowed to 2.7% from 3.8% in December. It was also the slowest pace of remittance growth since 2.6% posted in September.

“The growth in cash remittances in January 2024 was primarily due to increased receipts from both land- and sea-based workers,” the BSP said.

Land-based workers sent home $2.253 billion in January, up by 3.1% from $2.186 billion in the same month last year.

Remittances from sea-based OFWs grew by 1.1% to $582 million in January from $575.7 million a year earlier.

The BSP said that inflows from the United States, Saudi Arabia, the United Arab Emirates (UAE), and Singapore mainly contributed to the growth in remittances during the month.

Nearly half (41.8%) of total remittances came from OFWs in the United States. This was followed by Singapore (7.3%), Saudi Arabia (6%), Japan (5.8%), the United Kingdom (4.8%), and the UAE (3.3%).

Remittances from the top 10 countries accounted for 80% of overall remittances in January.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that growth in remittances, despite being slower than a year ago, remained a “bright spot” for the economy.

“Further reopening of the economy towards greater normalcy also led to increased spending with some pent-up demand or even some revenge spending by OFW families and dependents,” he said.

Mr. Ricafort noted that remittance growth eased in January from December due to seasonality factors. December is typically when cash remittances are the highest as OFWs send home more money for their families during the holidays.

Mr. Ricafort said remittances could continue to post modest growth for the rest of the year as OFW families “still need to cope with relatively higher prices locally that would require the sending of more remittances.”

Inflation accelerated for the first time in five months in February to 3.4% from 2.8% in January.

For the first two months of 2024, headline inflation averaged 3.1%. This year, the BSP expects inflation to average 3.6%.

“Lack of a global downturn in the developed markets despite the persistent drag of high interest rates and the preference of young, mobile Filipino workers to work offshore because of better compensation  and other career opportunities in the post-pandemic period support our forecasts of OFW remittances up by 3% in 2024 and by 2.8% in 2025,” Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said.

The BSP expects remittances to grow by 3% this year and next year.

Mr. Asuncion said the annual remittance forecasts assume quarterly remittance flows would likely surpass $8 billion every quarter, “leading to more than $9 billion in the fourth quarter.”

Meanwhile, BSP data also showed that personal remittances, which contain inflows in kind, increased by 2.7% to $3.153 billion in January from $3.071 billion in the same month a year ago.

“The increase in personal remittances in January 2024 was driven by increased remittances from land-based workers with work contracts of one year or more and sea- and land-based workers with work contracts of less than one year,” the BSP added.

In 2023, cash remittances hit a record-high $33.491 billion, up by 2.9% year on year.

However, this fell short of the BSP’s 3% estimate and was slower than the 3.6% expansion in 2022.

Source: Business World