ING Bank expects remittances from Filipinos working overseas to grow faster in the third quarter, following the 7.1-percent expansion seen in July.
ING Bank chief economist for Asia Rob Carnell said in a report Monday the start of the third quarter looked promising for remittances.
“OFW remittance growth in the third quarter will likely be faster than the second quarter growth of only 2 percent. July OFW remittances were up 7.1 percent year-on-year. Some positive base effects helped since July 2016 remittances contracted by 5.4 percent,” Carnell said.
He said remittances from the US, the Middle East and Asia”•accounting for 80 percent of the seven-month 2017 total remittances”•recorded a 9.7 percent, 6.7 percent and 9.7 percent increase year-on-year in July, respectively.
Carnell said the remittance growth in August might be slower, weighed down by negative base effects. “Remittances after August will likely see a more moderate pace of around 5 to 6 percent,” he said.
Latest data from the Bangko Sentral ng Pilipinas showed that money sent home by overseas Filipino workers increased 7.1 percent in July to $2.283 billion from $2.131 billion a year ago on sustained demand for skilled Filipino workers overseas.
The July expansion was also faster than the 5.7-percent growth a month ago. This brought cash remittances in the first seven months to $16.095 billion, up 5 percent from $15.323 billion a year ago.
“The sustained increase in remittances was supported by stable demand for skilled Filipino workers abroad,” the Bangko Sentral said in a statement.
Cash remittances from land-based workers (at $1.8 billion) and from sea-based workers (at $0.5 billion), posted 6.8 percent and 8.4 percent growth, respectively.
The primary sources of cash remittances are the United States (with 3.3 percentage points contribution), United Arab Emirates (1.1 percentage points), Singapore (0.8 percentage point), and Japan (0.6 percentage point).
Personal remittances, which include non-cash items, grew 8.7 percent in July to $2.559 billion from $2.355 billion a year ago. This brought personal remittances in the first seven months to $17.923 billion, up 5.9 percent from the $16.923 billion on year.
“The steady growth in personal remittances drew support from the remittance inflows from land-based workers with work contracts of one year or more, amounting to $13.8 billion, and compensation of sea-based workers and land-based workers with short-term contracts, which reached $3.6 billion,” the Bangko Sentral said.
