Remittances jumped 8.6 percent in January from a year ago, indicating a sustained growth in foreign inflows that support domestic consumption and economic growth, data from Bangko Sentral ng Pilipinas show.
Bangko Sentral Governor Amando Tetangco Jr. said money sent home by Filipinos working overseas reached $2.2 billion in January, up from $2 billion in the same month last year.
“Remittances of land-based workers amounted to $1.8 billion, 13.5 percent higher compared to the level posted in the same month a year ago,” Bangko Sentral said.
“Meanwhile, sea-based workers’ remittances declined by 8.3 percent year-on-year due to the stiffer competition in the supply of seafarers,” it said.
Bangko Sentral said on a month-on-month basis, cash remittances went down from $2.6 billion recorded in December, mainly because of seasonal factors. Filipinos working overseas usually send the biggest amount during the holidays.
Personal remittances, which include non- cash items, also increased 8.5 percent in January to $2.4 billion from $2.2 billion in the same month last year.
“The continued increase in personal remittances was mainly driven by the 13.5-percent growth in transfers from land-based workers with work contracts of one year or more [which summed up to $1.9 billion], more than offsetting the 8.3-percent decline in remittances from sea-based and land-based workers with work contracts of less than one year [at $0.4 billion],” Bangko Sentral said.
The main sources of cash remittances in January were the United States, Saudi Arabia, United Arab Emirates, United Kingdom, Japan, Singapore, Hong Kong, Qatar, Kuwait and Australia.
Remittances last year rose 5 percent to a record $26.9 billion from $25.607 billion in 2015, driven mainly by the sustained demand for skilled Filipino workers abroad and improving global economic condition.
The 5-percent expansion surpassed Bangko Sentral’s projection of a 4-percent growth last year and the 4-percent actual growth a year ago.
Remittances from Asia rose 7.4 percent, buoyed by transfers originating from Singapore, Japan, China and Taiwan. Transfers from the Americas increased by 3.8 percent, the major contributor of which was the 6.2-percent growth in remittances from the US.
Remittances from Europe, however, fell 8.4 percent, due to the decline in cash transfers from the United Kingdom due to the depreciation of the pound against the US dollar, Italy and the Netherlands.
More than 80 percent of the total remittances in 2016 came from the US, Saudi Arabia, UAE, Singapore UK, Japan, Qatar, Kuwait, Hong Kong and Germany.
The solid growth in remittances remained one of the strong backbones of economic growth. Last year, remittances represented 8.1 percent of the country’s gross national income and 9.8 percent of gross domestic product. GDP last year grew 6.8 percent.
Bangko Sentral Deputy Governor Diwa Guinigundo said earlier remittances were expected to remain stable in the coming months despite the recent decision of the Organization of the Petroleum Exporting Countries to cut oil production that may affect the demand for local skilled workers abroad.
Guinigundo also said that another factor that could contribute to the stability of remittances would be the development of new markets, aside from the Middle Eastern countries.
Bangko Sentral forecast a conservative 4-percent growth for remittances in 2017.
