Remittances rise 10.8% in January

Despite Kuwait deployment ban

MANILA, Philippines — Remittances continued to book strong growth in January despite the ban imposed by the government on the deployment of Filipino workers to Kuwait, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

BSP Governor Nestor Espenilla Jr. said personal remittances booked a double-digit growth of 10.8 percent to $2.65 billion in January from $2.39 billion in the same month last year. This was faster than the 7.9 percent increase recorded in December during the Christmas holidays.

Espenilla said the growth in personal remittances was steered by the 8.4 percent increase in remittances from land-based workers with work contracts of one year or more to $2.1 billion, as well as the 15.3 percent rise in the amount of money sent home by sea-based and land-based workers with work contracts of less than one year to $500 million.

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.

Likewise, Espenilla said cash remittances coursed through banks rose 9.7 percent to $2.38 billion in January from $2.17 billion in the same month last year. The growth was higher than the 7.1 percent rise in December.

The BSP Governor said cash remittances from land-based workers went up 8.4 percent to $1.9 billion, while the amount of money sent home by sea-based workers jumped 15.3 percent to $500 million.

The BSP chief said more than 80 percent of the cash remittances in January cam from the US, United Arab Emirates, Saudi Arabia, Singapore, United Kingdom, Japan, Qatar, Canada, Kuwait, and Germany.

According to Espenilla, cash remittances from the US grew 14.3 percent and contributed 4.6 percent to the overall growth.

He added remittances from Canada, Singapore, and the United Arab Emirates contributed a combined 4.6 percentage points to the total growth in cash remittances.

President Duterte has imposed a ban on the deployment of overseas Filipino workers to Kuwait over the recent death of seven migrant workers.

Authorities have downplayed the impact of the ban, saying Kuwait only accounts for about three percent of the total remittances, and cited the resiliency of Filipino workers who could find employment in other countries.

The BSP has set a four percent growth target for both personal and cash remittances this year.

Personal remittances went up 5.3 percent to a record $31.29 billion last year from $29.71 billion in 2016 while cash remittances grew 4.3 percent to an all-time high of $28.06 billion from $26.9 billion.

The peso has been weakening, making remittances more valuable.

Remittances continue to boost personal consumption, helping sustain a steady growth. Personal remittances accounted for 10 percent of gross domestic product (GDP) and 8.3 percent of gross national income (GNI) last year.

The Philippines booked 76 quarters of uninterrupted growth with the GDP expanding 6.6 percent in the fourth quarter from the revised seven percent in the third quarter.