MANILA, Philippines — Remittances from overseas Filipino workers (OFWs) increased at their fastest pace in three months as the impact of the rapid spread of the coronavirus disease 2019 or COVID-19 has not yet been felt, according to the Bangko Sentral ng Pilipinas (BSP).
Data released by the central bank yesterday showed personal remittances went up by 7.3 percent to $2.94 billion in January from $2.74 billion in the same month last year.
This was the fastest growth since October last year when personal remittances consisting of cash and non-cash items that flow through both formal or via electronic wire and informal channels increased by 7.7 percent.
Personal remittances from land-based workers with work contracts of one year or more rose by 7.4 percent to $2.27 billion from $2.12 billion, while remittances from sea-based and land-based workers with work contracts of less than one year expanded by nearly four percent to $600 million from $580 million.
Likewise, the BSP said cash remittances coursed through banks increased by 6.6 percent to $2.65 billion in January from $2.48 billion in the same month last year. This was the fastest growth since the eight percent increase recorded in October last year.
Data showed cash remittances from land-based OFWs went up by 7.4 percent to $2.1 billion, while that of sea-based Filipino workers increased by 3.8 percent to $550 million.
The BSP said the US registered the highest share of overall remittances at 38.6 percent, followed by Japan, Singapore, Saudi Arabia, the United Kingdom, United Arab Emirates, Qatar, Canada, Hong Kong and South Korea.
“The combined remittances from these countries accounted for almost 80 percent of total cash remittances,” the central bank said.
For 2020, the BSP sees OFW remittances, both personal and cash, growing by three percent. However, the projection set in November has yet to factor in the impact of the COVID-19 pandemic.
Last year, personal remittances increased by 3.9 percent to a record high of $33.47 billion in 2019 from $32.21 billion in 2018, while cash remittances coursed through banks went up by 4.1 percent to an all-time high of $30.13 billion from $28.94 billion.
BSP Deputy Governor Francisco Dakila Jr. said earlier travel restrictions arising from the COVID-19 outbreak could stave off 0.2 to 0.8 percentage points from the growth of OFW remittances this year.
However, Dakila said authorities are keeping the projected three-percent growth in cash remittances coursed through banks for this year until after the review ordered by Diokno on the impact of the virus outbreak on the country’s external payments position forecasts, including the balance of payments (BOP) and current account (CA), is completed by April.
“Any revision will be announced during the release of the revised BOP outlook,” Dakila said.
Dakila said the projected 0.2 to 0.8 percentage points hit in remittances took into account the temporary travel ban imposed by the country to China, Hong Kong, Macau and Taiwan.
However, the BSP official said remittances would remain resilient as a major source of foreign exchange.
“Again, our previous experiences have shown that remittances can be quite robust. There’s still shifting going on from one country to another in response to any shocks as in the past,” Dakila said.