BSP sees remittances rising 6% this year

MANILA, Philippines — Dollars sent home by expatriate Filipinos are expected to grow at a faster rate of six percent, from the original forecast of four percent this year, amid the continued reopening of economies hosting overseas Filipino workers (OFWs), according to the Bangko Sentral ng Pilipinas (BSP).

Zeno Ronald Abenoja, managing director of the BSP’s Department of Economic Research, said the Monetary Board took into consideration the robust growth in remittances with the redeployment of more OFWs as the global economy recovers from the impact of the pandemic.

“Now several factors support this upward revision. Firstly, is the sustained recovery of OFW remittances in the first half of the year. Secondly, we have observed increased global demand for foreign workers as host economies start rebooting their economies,” Abenoja said

Latest data released by the central bank showed personal remittances increased by six percent to $19.78 billion from January to July compared to last year’s $18.66 billion.

Personal remittances include all current transfers in cash or in kind by OFWs as well as other household-to-household transfers between Filipinos who have migrated abroad and their families in the Philippines.

Likewise, cash remittances coursed through banks expanded by 5.8 percent to $17.77 billion in the first seven months from a year-ago level of $16.8 billion

Both personal and cash remittances have been recording growth after contracting by 1.7 percent in January. The 2.6 percent growth in personal remittances in July was the slowest this year as it peaked at 13.3 percent in May, while the 2.5 percent rise in cash remittances was also the smallest for the year as it peaked at 13.1 percent also in May.

Abenoja also said enhanced access to digital financial services also facilitate remittance transfers.

BSP Department of Economic Statistics senior director Redentor Paolo Alegre said the last time full-year remittances grew by more than six percent was in 2014 when personal remittances increased by 7.5 percent, while cash remittances went up by 7.2 percent.

For 2022, the BSP sees OFW remittances posting a slower growth of four percent as overseas labor markets gradually recover amid further reopening of economies and supported by the mass use of COVID vaccines.

“Certainly, remittances seem to have bounced back from the small contraction that we have seen at the peak of the pandemic,” Abenoja said.