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Friday, March 29, 2024

Remittances rise 5% to $26.9b

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Money sent home by Filipinos working overseas grew 5 percent to a record $26.9 billion in 2016 from $25.607 billion in 2015, on sustained demand for skilled workers and improving global economic condition, Bangko Sentral ng Pilipinas said Wednesday.

The 5-percent expansion last year surpassed Bangko Sentral’s projection of a 4-percent growth and the 4-percent actual increase in 2015.

“Cash remittances in 2016 continued to increase on the back of improving global economic condition,” Bangko Sentral said. 

Personal remittances, which include non-cash items, grew 4.9 percent in 2016 to an all-time high of $29.706 billion from $28.308 billion in 2015.  The Philippines is one of the four largest recipients of remittances in the world, joining China, India and Mexico.

Cash remittances from the Middle East increased 12.7 percent, driven by transfers from Qatar, Kuwait, Oman and the United Arab Emirates.

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Remittances from Asia rose 7.4 percent, buoyed by transfers originating from Singapore, Japan, China and Taiwan. Transfers from the Americas increased 3.8 percent, led by the 6.2-percent growth in remittances from the US.

Remittances from Europe, however, fell 8.4 percent year-on-year, because of the decline in cash transfers from the United Kingdom following the depreciation of the British pound against the US dollar.  Transfers from Italy and the Netherlands also went down.

Data showed that in December alone, cash remittances grew 3.6 percent to a record $2.559 billion from $2.47 billion. The top countries that contributed to the increase in transfers in December were the US, Qatar and Japan.

Personal remittances rose 3.6 percent to $2.823 billion in December from $2.726 billion a year ago.

“The growth in personal remittances was steered by the 7.6-percent expansion in remittances from land-based workers with work contracts of one year or more, which totaled $23.2 billion,” Bangko Sentral said.

The solid growth in remittances supported economic expansion last year.  Remittances represented 8.1 percent of gross national income and 9.8 percent of gross domestic product in 2016. GDP grew 6.8 percent in 2016.

Bangko Sentral Deputy Governor Diwa Guinigundo said remittances was 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 could affect the demand for local skilled workers abroad.

He said the Philippines was now sending most professionals abroad, compared to the previous years when OFWs were composed mostly of domestic helpers and semi-skilled laborers. Guinigundo said this contributed a lot of material value to the stability of remittances.

Guinigundo 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 projected a conservative 4-percent growth for remittances in 2017.

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