July remittances climbed 2.5% to seven-month high of $2.85b

Remittances from Filipinos working overseas rose for the sixth straight month in July, providing the economy a strong buffer against external volatilities brought about by the global pandemic.

The Bangko Sentral ng Pilipinas said remittances rose 2.5 percent in July to $2.85 billion, the highest this year, from $2.78 billion a year ago. It was also higher than $2.64 billion registered in June.

It said in a statement remittances in the first seven months also increased 5.8 percent to hit a new record of $17.771 billion from $16.802 billion a year earlier, as travel restrictions eased further and global economies reopened despite the continuing global health crisis.

The Bangko Sentral said the growth in cash remittances in the seven-month period came mainly from the United States, Malaysia and South Korea.

Data showed the US registered the highest share of overall remittances at 40.4 percent from January to July, followed by Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, South Korea, Qatar and Taiwan. The combined remittances from these top 10 countries accounted for 78.6 percent of total cash remittances.

The BSP said the increase in cash remittances in July was due to the growth in remittances from land-based workers and sea-based workers, which rose by 1.6 percent to $2.308 billion from $2.273 billion a year earlier and by 6.9 percent to $545 million from $510 million,

Personal remittances, which include non-cash items, also improved 2.6 percent to $3.167 billion in July from $3.085 billion a year ago. This brought the cumulative remittances in the first seven months to $19.783 billion, up 6 percent from $18.658 billion registered in the comparable period in 2020.

The growth in personal remittances in July was due to remittances sent by land-based workers with work contracts of one year or more, which grew by 1.6 percent to $2.506 billion from $2.467 billion in the same period last year, and sea- and land-based workers with work contracts of less than one year, which increased by 6.9 percent to $595 million from $557 million a year ago.

“We can expect the uptrend in remittance inflows as travel restrictions ease further and global economies now reopen,” BSP Governor Benjamin Diokno told a joint general assembly of the Financial Markets Association, Fund Managers Association of the Philippines, Investment House Association of the Philippines, Money Market Association of the Philippines, National Association of Securities Broker Salesmen Inc., and Trust Officers Association of the Philippines on Tuesday.

Cash remittances slightly declined by 0.8 percent last year to $29.903 billion from a record $30.133 billion in 2019 with the onset of the pandemic. This was better than the earlier forecast of a 20-percent contraction by some analysts.

The BSP expects cash remittances to grow by 4 percent this year, taking into account the brighter global economic outlook amid the rollout of COVID-19 vaccines and the reopening of major economies.