Cash remittances in the first 10 months rose 5.3 percent to $25.929 billion from $24.633 billion a year ago as global economies continue to reopen amid the pandemic, data from the Bangko Sentral ng Pilipinas on Wednesday show.
“The growth in cash remittances from the United States, Taiwan, and Malaysia contributed largely to the increase in remittances in January-October 2021,” BSP said in a statement. The global reopening has led to the deployment of Filipino workers overseas.
The US posted the highest share of overall remittances at 40.9 percent in the first 10 months of 2021, followed by Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, Taiwan, Qatar, and South Korea. The combined remittances from these top 10 countries accounted for 79 percent of total cash remittances during the period.
Cash remittances in October increased 2.4 percent to US$2.812 billion in October 2021 from US$2.747 billion registered in the same month in 2020.
“The expansion in cash remittances was due to the increase in receipts from land-based and sea-based workers, which rose by 2.8 percent [to $2.247 billion from $2.186 billion] and 0.6 percent (to $565 million from $561 million), respectively,” BSP said.
Personal remittances, which include non-cash items, reached $3.117 billion in October 2021, higher by 2.4 percent than the $3.044 billion recorded in the same month last year. These resulted in the increase in cumulative remittances by 5.4 percent to $28.816 billion in the first 10 months of 2021 from $27.346 billion posted in the comparable period in 2020.
The BSP attributed the increase in personal remittances in October to money sent by land-based workers with work contracts of one year or more. They rose 2.8 percent to $2.441 billion from $2.374 billion in the same month last year, while sea- and land-based workers with work contracts of less than one year grew 0.5 percent to $615 million from $612 million a year ago.
Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said remittances remained a bright spot for the Philippine economy. The level is near the highest since the pandemic started. Over 800,000 OFWs were repatriated since the pandemic last year, but some of whom already recovered or restored the jobs that they have lost as the global economy re-opened and recovered further from the adverse effects of the pandemic.
“OFW remittances and conversion to pesos are expected to seasonally increase in 4Q especially towards the Christmas season, as consistently seen for many years and decades,” Ricafort said.
He said these could support faster growth in consumer spending, which accounts for at least 70 percent of the economy.
Remittances account for around 10 percent of the GDP annually. Last year, remittances slightly declined 0.8 percent to $29.903 billion from the record $30.133 billion in 2019 as the pandemic impacted the deployment of overseas Filipino workers and many countries implemented stricter quarantine restrictions.
However, the 0.8-percent decline was better than the earlier forecast of a 20-percent contraction by some analysts at the height of the onslaught of the pandemic.
The BSP this year projects cash remittances to grow 6 percent on the back of improving global economic outlook.