OFW remittances rise 4% in August

MANILA, Philippines — Remittances sent home by overseas Filipino workers (OFWs) went up by 4.2 percent to $2.87 billion in August from $2.76 billion in the same month last year, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

This brought the inflow of personal remittances from January to August to $21.99 billion, up by 3.6 percent from $21.22 billion in the same period last year.

Personal remittances represent the sum of 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.

“The steady growth in personal remittances during the first eight months drew support from the remittance inflows from land-based overseas Filipino workers which amounted to $16.8 billion from $16.3 billion in the same period last year,” the BSP said.

It also said inflows from the compensation of sea-based workers and land-based workers with short-term contracts also contributed to this growth, totalling $4.7 billion from $4.4 billion a year ago.

Likewise, the BSP said cash remittances coursed through banks also went up by 4.6 percent to $2.59 billion in August from $2.47 billion in the same month last year.

For the first eight months, cash remittances increased by nearly four percent to $19.81 billion from $19.06 billion in the same period last year.

Remittances from land-based workers increased by 2.8 percent to $15.5 billion and from sea-based workers by 8.2 percent to $4.3 billion.

According to the BSP, the US registered the highest share of overall remittances in the first eight months with a share of 37 percent followed by Saudi Arabia, Singapore, United Arab Emirates, the United Kingdom, Japan, Canada, Hong Kong, Germany and Kuwait.

“The combined remittances from these countries accounted for 78.4 percent of the total cash remittances from January to August,” the central bank said.

The BSP has retained the growth target for both personal and cash remittances at three percent for this year.

Remittances usually fuel personal consumption helping sustain a steady economic growth. The amount of money sent home by overseas Filipinos usually account for 10 percent of gross domestic product (GDP).

Strong inflows from remittances, earnings of the business process outsourcing (BPO) sector as well as tourism receipts continued to boost the peso that recovered strongly late last year.

Rizal Commercial Banking Corp. chief economist Michael Ricafort attributed the slower growth of remittances in August from July to the slower global economic growth outlook largely due to the lingering and escalating US-China trade war that led to some contraction in manufacturing gauges in most developed countries such as the US, China, and Europe.

Ricafort said the slower growth in remittances was also due to the higher dollar-peso exchange rate in August compared to the rate in July.

“This, higher value of the dollar/peso required the remittance and conversion of less amount of dollar or foreign currency to pay for the same amount of expenses in pesos, thereby partly leading  to slower growth in remittances,” he said.