June 18, 2019
MONEY sent home by overseas Filipino workers (OFWs) reached $10.811 billion in the first four months of 2019, a 3.7-percent increase from $10.426 billion in the same period last year, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.
For April alone, personal remittances totaled $2.713 billion, up 3.7 percent from $2.616 billion in the same month in 2018, but down 2.9 percent from $2.796 billion in March this year.
Such remittances sum up the net compensation of OFWs; personal transfers, cash or otherwise, and capital transfers between households.
“The continued growth in personal remittances during the first four months of 2019 was driven by steady remittance inflows from land-based OF workers with work contracts of one year or more, which aggregated to $8.2 billion from $8.1 billion in the same period last year,” BSP Governor Benjamin Diokno said in a statement.
Cash remittances, which only count money coursed through banks, rose by 4 percent to $2.441 billion in April from $2.347 billion a year earlier. It fell by 2.9 percent, however, from $2.514 billion in March.
“This growth was supported by remittances from both land-based ($1.8 billion) and sea-based ($0.6 billion) workers, which rose by 2.2 percent and 10.6 percent, respectively,” Diokno explained.
In a comment, ING Bank Manila senior economist Nicholas Antonio Mapa said the cash remittances’ year-on-year growth was achieved despite another month of contraction in remittances from the Middle East, with the streak of negative growth hitting its 16th month.
“Flows from Kuwait, Qatar and [the] UAE (United Arab Emirates) reported negative growth, although the remittances from Saudia Arabia managed to increase by 4.3 percent,” he noted.
Offsetting the weakness in flows from the Middle East, Mapa said, were increased funds from the United States and Asia, up 16.1 percent and 10.3 percent, respectively.
“We expect remittances to sustain its current 3-4 percent pace of growth, which will eventually lead to current account surpluses in the medium term as the investment cycle turns and the trade deficit reverts to more normal levels,” he added.
The economist also said “bouts of strong remittance flows will help temper peso weakness, but given the prospects for a still-wide trade gap in 2019, we do expect tactical peso strength to give way to fundamental weakness by yearend.”
Year to date, cash remittances grew by 4.1 percent to $9.739 billion from $9.353 billion last year and by 33.4 percent from the $7.299 billion as of March.
By country source, the US posted the highest share of overall remittances for the period at 35.9 percent, according to Diokno.
It was followed by Saudi Arabia, Singapore, UAE, the United Kingdom, Japan, Canada, Hong Kong, Qatar and Germany.
The combined remittances from these countries accounted for almost 78 percent of cash remittances from January to April this year.
OFW remittances hit $32.21 billion last year, the “highest annual level to date,” the central bank said.
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