By Melissa Luz T. Lopez
Senior Reporter
MONEY SENT HOME by overseas Filipino workers (OFWs) grew in November last year, sustaining an increase for the third straight month and likely fueling household spending in 2018’s fourth quarter, according to data released on Tuesday by the Bangko Sentral ng Pilipinas (BSP).
Cash remittances totalled $2.326 billion that month, increasing by 2.8% from the $2.262 billion recorded in November 2017, even as it slipped from the $2.474 billion funds sent by OFWs in October, which recorded an 8.7% growth.
In a statement, the central bank said bigger remittances from workers based in Canada and the United States supported the year-on-year growth.
Cash transfers from OFWs support household spending and, in turn, overall economic growth.
Household spending has long been touted as the biggest driver of economic activity, but the pickup in consumption has softened in recent quarters just as surging inflation started to bite.
November inflows brought the year-to-date remittance tally to $26.094 billion, up 3.1% compared to the $25.318 billion recorded in 2017’s comparable 11 months.
This came on the back of bigger money transfers from land-based OFWs that went up by 2.8% to $20.5 billion, and a 4.1% increase in remittances from those at sea who wired $5.5 billion back home.
Filipinos in the United States continued to be the biggest sources of funds as of end-November, having sent $8.998 billion so far.
That was followed by cash transfers through banks by OFWs in Saudi Arabia ($2.033 billion), United Arab Emirates ($1.857 billion), Singapore ($1.662 billion) and Japan ($1.359 billion).
The BSP expects full-year remittances to log three percent higher than the $28.06 billion which the country received in 2017.
This translates to roughly $29 billion, which if realized would make 2018 another banner year.
Sought for comment, one analyst said the uptick in November remittances likely reflected early inflows ahead of the Christmas season.
“These are good numbers and were definitely driven by holiday spending,” said Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines, Inc.
Remittances usually peak towards December each year as OFWs send more money to fund increased spending for festivities and gifts during the holidays. In turn, increased household spending is seen to bode well for the domestic economy.
“December numbers are expected to be supported by the same driver: Christmas consumption. These will most certainly be positive for Q4 GDP (gross domestic product) economic growth,” Mr. Asuncion added.
Philippine GDP grew 6.1% in the third quarter of 2018, marking the slowest climb in three years and keeping the nine-month pace at 6.3%, well below the state’s downward-revised target of 6.5-6.9%.
This came as private consumption eased to a 5.2% increase, eaten up by surging prices of basic goods and services.