Remittances climb 8.6% in Jan

MANILA, Philippines -  Remittances from overseas Filipino workers climbed faster at 8.6 percent in January amid the steady deployment of skilled Filipino workers abroad as well as resilient remittances from the US, the Bangko Sentral ng Pilipinas reported yesterday.

BSP Governor Amando Tetangco Jr. said cash remittances amounted to $2.17 billion in January, $172 million higher than the $1.99 billion booked in the same period last year.

Remittances from land-based Filipino workers jumped 13.5 percent to $1.8 billion while those from sea-based workers fell 8.3 percent to about $400 million due to the stiffer competition in the supply of seafarers.

Filipinos in the US, Saudi Arabia, United Arab Emirates, the United Kingdom, Japan, Singapore, Hong Kong, Qatar Kuwait and Australia cornered 79 percent of the total remittances in January, according to the BSP data.

Tetangco said remittances from the US went up 9.2 percent, accounting for three percentage points of the 8.6 percent increase recorded in January.

Remittances from Singapore, Qatar, and Japan likewise posted strong growth and contributed 3.8 percentage points to the total growth in cash remittances at the start of the year.

Personal remittances rose 8.6 percent to $2.39 billion in January from $2.21 billion in the same month last year, according to central bank data.

Personal remittance is computed as the sum of gross earnings of overseas Filipino workers with work contracts of less than one year, including all sea-based workers, less taxes, social contributions, and transportation and travel expenditures in their host countries.

Cash remittances increased five percent to hit a record high of $26.9 billion in 2016, erasing the previous record of $25.61 billion registered in 2015 while personal remittances rose 4.9 percent to a new record of $29.71 billion from $28.31 billion amid the improving global economic conditions.

The five percent growth in cash remittances was also faster than the four percent growth target of the BSP.

For this year, the BSP expects a four percent growth in cash remittances to reach a new record level.

ING Bank chief economist for Asia Tim Condon sees a steady “mid-single” digit growth in remittances this year.

He explained the re-pricing for the negative swing in the current account balance turned the peso into an Asian underperformer in 2016.

“It appreciates less when the dollar depreciates and depreciates more when the dollar appreciates,” he said.

The investment bank has set a yearend forecast of 51.9 to $1 for this year. The local currency weakened to a fresh low in more than a decade after closing at 50.40 to $1 early this month due to the much anticipated rate hike by the US Federal Reserve.

The amount of money sent home by more than 12 million Filipinos abroad that help boost private consumption accounts four about 10 percent of the country’s gross domestic product (GDP).