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Remittances bounce back in Sept.
By Luz Wendy T. Noble, Reporter
CASH REMITTANCES from overseas Filipinos rebounded in September, growing at the fastest pace in more than two years after a decline in August.
Cash remittances coursed through banks jumped by 9.3% to $2.601 billion in September from $2.379 billion a year ago, data released by the Bangko Sentral ng Pilipinas on Monday showed. This was the quickest growth in remittance inflows since 12.7% in April 2018.
Month on month, cash remittances also rose by 4.8% from $2.483 billion in August, when these dropped by an annual 4.1%.
The BSP reported a 10.2% rise in remittances from land-based overseas Filipino workers (OFWs) to $2.031 billion, and a 6.5% jump in money sent by sea-based workers to $570 million.
“The year-on-year comparison benefited from a low base from last year. But if we look at the month-on-month figure, growth registered 4.8% based on actual levels, which means that overseas workers have been sending more money than usual to relatives here, underscoring the altruistic component of remittances amidst the pandemic,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a text message.
He said the deployment of seafarers in recent months had also helped remittance inflows recover.
The Philippine Overseas Employment Agency earlier said more than 136,000 sea-based OFWs were deployed from July to September, as the government launched a green lane for seafarers to help process their departure.
Money sent home by OFWs in the medical field and other essential industries may have also supported remittance growth in September, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.
“Further economic recovery in various host countries as they reopened from COVID-19 (coronavirus disease 2019) lockdowns may have allowed more OFWs to work again,” he added.
Meanwhile, remittance inflows in the first nine months of the year reached $21.886 billion, slipping by 1.4% from $22.187 billion a year ago. The decline is slower than the 2% drop in remittances expected by the BSP this year.
“By country source, cash remittances for January to September from the United States, Singapore, Qatar, Hong Kong and Taiwan were among the countries that registered growth, while declines were noted in Saudi Arabia, the United Arab Emirates (UAE), Germany, Kuwait and the United Kingdom,” the central bank said in a statement.
The United States was the source of 40.1% of the inflows, making it the biggest remittance market, followed by Singapore, Saudi Arabia, Japan, UK, UAE, Canada, Hong Kong, Qatar and Taiwan. Total cash remittances from these economies made up 78.8% of the inflows.
Meanwhile, personal remittances also climbed by 9.1% to $2.888 billion in September from $2.648 billion a year ago. This brought year-to-date inflows to $24.302 billion, 1.4% lower than $24.643 billion in the first nine months of 2019.
A continued pickup in remittances is likely in the next few months because overseas Filipinos typically send money to their families during the Christmas season, said Mr. Ricafort.
“Some adversely affected OFWs could also tap their savings; some laid off OFWs could also tap part of their separation/retirement pay,” he said.
Mr. Ricafort said a faster recovery in remittance inflows would support consumption during the crisis.
In the third quarter, household spending continued to decline by 9.3% year on year, though softer than the 15.3% fall in the second quarter.
Meanwhile, Mr. Roces said a new wave of coronavirus infections in some host economies could affect the remittance outlook.
“We remain cautiously optimistic because uncertainties remain relative to global recovery on the back of a resurgence in COVID-19 cases in the US and Europe. The absence of a new fiscal stimulus package in the US this fourth quarter also provides a downside risk to remittance levels,” he said.
COVID-19 cases across the world reached more than 54.4 million, the Johns Hopkins Coronavirus Resource Center said on Monday. More than 11 million COVID-19 cases are in the US.
A surge in infections prompted some European countries to reimpose lockdowns, including France, Germany and England.
More than 254,000 OFWs have come home as of Nov. 15. The government expects 300,000 migrant workers to return by end-2020.