Remittances surged 16.3 percent in August from a year ago, the fastest growth in 29 months and fueling the growth of consumer spending in the third quarter.
Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla said cash remittances in August hit $2.32 billion, up from $1.95 billion registered a year ago, driven mainly by transfers from land-based workers.
Data showed the August expansion was a sharp reversal from the 5.4-percent decline recorded in July this year. This was also the fastest expansion since the 16.6-percent rise recorded in March 2014.
This brought total cash remittances in the first eight months to $17.64 billion, up 4.6 percent from $16.87 billion a year ago. The 4.6-percent growth in the first eight months already matched the expansion last year and surpassed the conservative 4-percent growth projection by Bangko Sentral.
Bangko Sentral said cash remittances from land-based workers rose 6.5 percent to $13.1 billion, while remittances from sea-based workers fell 1.9 percent to $3.8 billion.
About 80 percent of cash remittances came from the United States, Saudi Arabia, the United Arab Emirates, Singapore, the United Kingdom, Japan, Qatar, Kuwait, Hong Kong and Germany.
Meanwhile, personal remittances, which include non-cash items, also climbed 16 percent in August, the fastest in 29 months, to $2.56 billion from $2.2 billion a year earlier.
This was a sharp turnaround from the 5.4-percent decline a month ago and marked the fastest growth since the 16.9-percent increase in March 2014.
Personal remittances in the first eight months hit $19.482 billion, up 4.4 percent from $18.653 billion in the same period last year.
Bangko Sentral Deputy Governor Diwa Guinigundo earlier expressed optimism the country’s external payments position would remain strong because the sustained robust business process outsourcing revenues were negating the impact of derisking efforts of some financial institutions abroad to the flow of remittances from overseas Filipino workers.
Remittances and BPO revenues provide steady inflows which boost private consumption. Together, they account for nearly $50 billion worth of inflows every year.
ING Bank regional economist Tim Condon said he was expecting remittances growth this year to decelerate to 3.4 percent from around 4 percent in 2015.
“Remittances grew by a very steady 7.3 percent annualized average in 2009-2014. Growth was 4 percent in 2015 and through July was 3percent. Our forecast for full-year growth is 3.4 percent,” Condon said.
A recent report by the World Bank said remittances entered a “new normal” of slow growth, estimated at 3.5 percent over the next two years, with the Philippines expected to experience the slowest growth in a decade.
Cash remittances from Filipinos working overseas grew 4.6 percent to a record $25.767 billion in 2015 from $24.628 billion in 2014. The amount accounted for around 10 percent of gross domestic product last year. GDP grew 5.8 percent in 2015 and 6.9 percent in the first half of 2016.