OVERSEAS Filipino workers (OFWs) sent more money home in April, clocking the fastest growth in over a year on the back of a weaker peso, the central bank reported on Monday.
Cash remittances reached $2.347 billion that month, up 12.7% from the $2.083-billion inflows recorded in April 2017 to post the biggest increase since an 18.5% growth seen in November 2016, according to the Bangko Sentral ng Pilipinas (BSP).
The amount, however, was still smaller than the $2.36 billion wired by OFWs in March.
The year-on-year growth compares to a 5.9% annual decline in remittances that marked April last year.
In a statement, the BSP attributed the increase to a 15.1% jump to $1.8 billion in bank transfers from land-based OFWs. Those working at sea wired home $500 million, picking up by 4.8% year-on-year.
Filipinos working in the United States, Canada and Singapore accounted for bulk of funds sent home that month, the central bank added.
April’s figure brought year-to-date remittances to $9.353 billion, 3.5% more than the $9.036-billion inflows received in the same period in 2017.
The biggest sources of remittances year-to-date have been OFWs in the US ($3.167 billion), Saudi Arabia ($745.771 million), United Arab Emirates ($733.906 million), Singapore ($581.005 million), Japan ($510.665 million) and the United Kingdom ($468.996 million).
MORE CASH TO SPEND
Remittances give Filipino households more cash to spend, in turn fueling overall economic growth.
“It seems that there is a correlation between the peso weakness and remittances,” said Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc.
“The probability that more remittances will flow into the economic system is high when more peso is exchanged for foreign currency, particularly the US dollar.”
The peso averaged P52.0986 to greenback in April, compared to P49.8626 in April 2017.
“I did expect remittances inflows to be stronger this Q2,” Mr. Asuncion said. “This higher April data… can impact a stronger Q2 growth that may be higher than Q1, which is within our forecast.”
The Philippine economy expanded by 6.8% in January-March as household spending — which has historically accounted for more than 60% of gross domestic product — contributed 3.9 percentage points to growth. — Melissa Luz T. Lopez