Remittances rise to $20.72 B in 8 months

MANILA, Philippines — The amount of money sent by overseas Filipinos to the Philippines in August grew at its fastest pace in five months as new markets for skilled Filipino workers have been found, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

BSP Deputy Governor Diwa Guinigundo said the strong demand for Filipino labor has been sustained due to aging populations in advanced economies and some countries in the Asian region.

“Skill sets are vastly different, new markets for Filipino skills have been found,” Guinigundo said.

BSP data showed personal remittances rose 9.8 percent to $2.8 billion in August from $2.56 billion in the same month last year. This was the fastest since the 10.7 percent increase and the highest since the record high $2.91 billion posted in March.

For the first eight months, personal remittances rose 6.4 percent to $20.72 billion from $19.48 billion in the same period last year.

Personal remittances represent the sum of net compensation of employees, personal transfers, and capital transfers between households. It measures cash and non-cash items that flow through both formal or via electronic wire and informal channels such as money or goods carried across borders.

On the other hand, the central bank said cash remittances coursed through banks grew 7.8 percent to $2.5 billion in August from $2.32 billion in the same month last year.

This was also the fastest in five months or since March when it grew 11.8 percent and the highest since cash remittances reached a monthly record of $2.61 billion last March.

According to the central bank, primary contributors to the rise in cash remittances last August were the United Arab Emirates, the US, Singapore and Qatar.

Cash remittances went up 5.4 percent to $18.59 billion from January to August compared to $17.64 billion in the same period last year.

Data showed the bulk, or 82.5 percent, of the cash remittances in the first eight months came from the US, Saudi Arabia, UAE, Singapore, Japan, the United Kingdom, Qatar, Kuwait, Germany, and Hong Kong.

The BSP has pegged the projected growth in personal and cash remittances at four percent this year.

Remittances from about 12 million Filipinos living and working abroad contribute about 10 percent of the gross domestic product (GDP). Remittances together with business process outsourcing (BPO) and tourism receipts serve as a major source of foreign exchange buffer that help shield the Philippines from external shocks.

“This is good for the current account. As imports continue to grow but at slower pace and exports rebound, resilient remittances can mitigate the emergent current account shortfall and also provide support to the peso,” Guinigundo said.

The Philippines is seen posting its first current account deficit in 15 years at $600 million or 0.2 percent of GDP instead of a surplus of $800 million or 0.6 percent of GDP due to strong import growth.