Jan. remittances rise fastest in 10 months, dip from Dec.
By Melissa Luz T. Lopez
Senior Reporter
CASH SENT HOME by overseas Filipino workers (OFWs) increased by the fastest year-on-year clip in 10 months in January even as the amount fell from December last year, according to data the central bank released on Thursday.
OFW cash remittances grew 9.7% to $2.379 billion in January from $2.169 billion a year ago, marking the fastest pace since March 2017’s 10.7% year-on-year increase.
However, January inflows declined by 13.21% from the record $2.741-billion remittances received in December, according to the Bangko Sentral ng Pilipinas (BSP).
Cash sent home by sea-based workers grew by 15.3%, while those from land-based OFWs increased by 8.4%, the BSP reported.
The United States remained the biggest source of cash sent home via banks, with remittances from that country growing by 14.3% and contributing 4.6 percentage points to the 9.7% overall growth.
The other major contributors to remittances were the United Arab Emirates, Saudi Arabia, Singapore, United Kingdom, Japan, Qatar, Canada, Kuwait, and Germany.
These countries accounted for more than 80% of total cash remittances, the BSP noted.
“The faster growth in OFW remittances may be attributed to the pickup in global economic growth led by the US, the world’s biggest economy,” said Michael L. Ricafort, economist at the Rizal Commercial Banking Corp., said when sought for comment.
“The increase in global oil/commodity prices in recent months may have also improved the economies of some host countries of OFWs,” Mr. Ricafort added, pointing out that Filipinos working in the oil-rich Middle East likely benefitted from three-year-highs for oil prices.
The recent weakness of the peso against the dollar also provided an additional incentive for workers to send more cash home, in turn further fueling household spending that is an anchor of the economy.
The peso averaged P50.5087 to the greenback in January, coming from P49.7363 per dollar a year ago.
“With the greater US dollar equivalent of OFW remittances amid relatively higher value of the US dollar vs. the Philippine peso since the start of 2018, this results in greater peso proceeds of OFW remittances sent to the Philippines,” the analyst said.
“This will further boost consumer spending, which accounts for nearly 70% of Philippine economy.”
The central bank expects remittances to grow by another four percent to more than $29 billion this year. Last year, remittances grew by 4.3% to $28.06 billion.
Analysts at HSBC Global Research had said in a report earlier this week that they expect faster remittance growth this year, but flagged the OFW deployment ban to Kuwait ordered by President Rodrigo R. Duterte as a key risk.
