By Melissa Luz T. Lopez
Senior Reporter
REMITTANCES may have grown by over 9% in May following the lifting of a deployment ban on overseas workers to Kuwait, HSBC Global Research said.
Bank economists estimate a 9.2% increase in remittances from overseas Filipino workers (OFWs) for the month. If realized, this will follow a 12.7% increase posted in April, when money sent home by OFWs hit $2.347 billion.
The Bangko Sentral ng Pilipinas (BSP) will report latest remittances data today. Remittances totaled $2.31 billion in May 2017, up 5.5% year on year.
HSBC expects a sustained recovery for these cash transfers, sustaining year-on-year growth since a 9.8% contraction recorded in March. Month-on-month growth for May is expected to come in at 7.5%.
“Remittances growth has been robust across regions with the exception of the Middle East, where remittances have declined on a yearly basis since the beginning of the year due partly to restrictions on Overseas Filipino Workers’ deployment to Kuwait at the start of the year,” HSBC said in a report released over the weekend.
“We expect this to recover toward the end of the year now that the ban has been lifted and for remittances growth to remain broadly in line with its historical trend of 5-6%.”
Remittances from the Middle East dropped 10.5% over the past few months to $2.249 billion from $2.512 billion during the same year-earlier period after a repatriation order issued by President Rodrigo R. Duterte for Filipinos in Kuwait in February, followed by a deployment ban amid reports of abuse.
The ban was in place for several weeks until the two nations signed an agreement in early May. In the interim, remittances from Kuwait declined by 8.9% from a year earlier.
Cash transfers from OFWs provide extra money for their families back home, supporting domestic activity and overall economic growth. The remittances also help offset imports and help improve global trade balances.
Remittances have totaled $9.353 billion as of the end of April, up 3.5% from a year earlier.
The central bank expects remittances to hit another all-time high and grow by another four percent in 2018, a record $28.06 billion in 2017.
In the four months to April, the United States remained the biggest source of remittances with a total of $3.167 billion, followed by Saudi Arabia ($745.771 million), United Arab Emirates ($733.906 million), Singapore ($581.005 million) and Japan ($510.665 million), according to BSP data.