Money sent home by Filipinos working overseas jumped 9.7 percent in January from a year ago, the fastest increase in 10 months, supporting economic growth this year, data from the Bangko Sentral ng Pilipinas show.
The Bangko Sentral said remittances reached $2.37 billion in January, up from $2.169 billion in the same month last year.
Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said in a statement remittances from both land-based ($1.9 billion) and sea-based ($5000 million) workers increased by 8.4 percent and 15.3 percent year-on-year, respectively.
“By country source, the bulk of cash remittances came from the US, UAE, Saudi Arabia, Singapore, the UK, Japan, Qatar, Canada, Kuwait and Germany. The combined remittances from these countries accounted for more than 80 percent of total cash remittances,” Espenilla said.
Personal remittances, which include non-cash items, also expanded 10.8 percent in January to $2.655 billion from $2.396 billion a year earlier, also the fastest increase in 10 months, or since the 11.8-percent expansion in March 2017.
The Bangko Sentral said personal remittances from land-based workers with work contracts of one year or more hit $2.1 billion, up by 8.4 percent from a year ago.
Remittances from sea-based and land-based workers with work contracts of less than one year rose 15.3 percent to $500 million.
Remittances together with business process outsourcing receipts account for around $50-billion inflows annually and serve as a steady source of strength of the country’s external payments position.
Money sent home by overseas Filipinos reached a record $28.06 billion in 2017, up 4.3 percent from $26.90 billion in 2016 and exceeded the Bangko Sentral’s conservative 4-percent growth target for the year.
The higher cash remittances in 2017 were supported by the increase in transfers from both land-based and sea-based workers by 4 percent and 5.4 percent, respectively.
Personal remittances also jumped to a record $31.288 billion in 2017, up 5.3 percent from $29.706 billion in 2016.
The 2017 level of personal remittances accounted for 10 percent of gross domestic product (which grew by 6.7 percent) and 8.3 percent of gross national income.
Hongkong & Shanghai Banking Corp. said it expected remittances from Filipinos working overseas to grow 5 percent in 2018, following a 4.3-percent expansion last year, as migrant Filipinos were likely to take advantage of the weak peso.
“Overall remittances grew 4.3 percent year-on-year in 2017, slower than the 5-percent growth in the previous year. We anticipate remittances to rebound in 2018, growing back to its recent trend of around 5 percent, as overseas Filipino workers take advantage of the weak peso,” HSBC said in a report.
The local peso has been hovering near 52 a dollar since the last week of January 2018, as the improving US economy buoyed the greenback against other currencies.
HSBC said, however, that the Duterte administration’s plan to halt the deployment of Filipino workers to Kuwait could hurt the growth trajectory of remittances this year.
“Downside risks persist given the Duterte administration’s proposal to ban OFWs from going to Kuwait due to recent abuse and maltreatment cases,” the British bank said.
Bangko Sentral ng Pilipinas deputy governor Diwa Guinigundo said last week the proposed total deployment ban of OFWs to some countries in the Middle East due to reported abuses and maltreatment would not have significant impact on remittances growth this year as Filipinos were known to be resourceful enough to find other jobs in other countries.
Finance Secretary Carlos Dominguez III echoed this sentiment, saying overseas Filipinos with the help of the government could tap non-traditional labor markets such as China and Russia.