Remittances rebound by 9.3% in Dec — HSBC

MANILA, Philippines — British banking giant HSBC said remittances from Filipinos abroad may have rebounded strongly in December in time for the Christmas holidays, enabling the country to exceed the projected four percent growth set by the Bangko Sentral ng Pilipinas (BSP).

HSBC said in its latest research note that remittances likely grew 9.3 percent in December as overseas Filipino workers sent more money back home for the holidays after holding off in November.

The BSP reported a slower growth of 3.2 percent to $2.52 billion for personal remittances and two percent to $2.26 billion for cash remittances in November.

“Figures indicate that remittances in November declined 0.6 percent from the previous month, which suggests that a big bounce back was due in December,” the bank said.

Latest data from the central bank showed cash remittances coursed through banks rose four percent to $25.3 billion, while personal remittances grew 5.1 percent to $28.2 billion from January to November last year.

The BSP targeted a four percent growth in both cash and personal remittances for 2017.

Despite the strong rebound in December, HSBC said the growth in remittances likely eased to 4.5 percent in 2017 from 5.4 percent in 2016.

“A growth rate of 9.3 percent year-on-year in December would represent remittance growth of around 4.5 percent year-on-year for 2017 as a whole, lower than the 5.4 percent for the previous year,” HSBC said.

For 2018, the BSP sees remittances climbing four percent.

Earlier, BSP Deputy Governor Diwa Guinigundo said the amount of money sent home by Filipinos abroad would continue to grow despite the setbacks arising from the deployment ban to Kuwait as well as the imposition of higher fees on remittances.

Guinigundo said the decision of Malacañang to impose a ban on the deployment of Filipino workers to Kuwait would have a minimal impact on remittances.

He pointed out cash remittances from Kuwait account for only about three percent of total remittances.

“On the ban on deployment of OFW to Kuwait, the impact may not be significant. Prospective workers may still be deployed to other countries with demand for Filipino workers,” he said.

Likewise, he clarified that Filipinos working abroad are exempted from the payment of documentary stamp tax (DST) on remittances that was doubled to 60 centavos for every P200 from the previous 30 centavos under Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law signed by President Duterte last Dec. 19.

Amid the steady growth, remittances would continue to exceed receipts from the business process outsourcing (BPO) sector and contribute about 10 percent of the gross domestic product (GDP).