A man accepts Philippine peso bills at a money remittance center in Makati City, Metro Manila, Philippines, Sept. 19, 2018. — REUTERS/ELOISA LOPEZ

By Keisha B. Ta-asan, Reporter

MONEY SENT HOME by overseas Filipino workers (OFWs) rose by 3.5% in October, with migrants taking advantage of the strong dollar ahead of the holiday season.   

Data from the Bangko Sentral ng Pilipinas (BSP) released on Thursday showed cash remittances through banks stood at $2.91 billion in October, higher than the $2.81 billion in the same month in 2021.

The amount of money sent by migrant workers was the highest in three months or since the $2.92 billion in July.

Overseas Filipinos’ cash remittances (Oct. 2022)Month on month, the 3.5% growth in cash remittances was weaker than the 3.8% seen in September, and marked the slowest pace in remittance growth since 2.3% in July.

“The expansion in cash remittances in October 2022 was due to the growth in receipts from land-based and sea-based workers,” the central bank said in a statement. 

Land-based OFWs sent $2.33 billion in October, up by 3.6% from $2.25 billion in the same month last year. Remittances from sea-based workers, on the other hand, rose by 3.4% to $583.803 million in October from $564.817 million a year ago.

“Remittances growth will likely remain modestly positive as we approach the holiday season, with first face-to-face celebrations. The relatively depreciated peso in October is additional impetus to send in advance remittances from abroad,” China Banking Corp. Chief Economist Domini S. Velasquez said in a Viber message. 

The peso slumped to its record low when it closed at P59 against the dollar on Oct. 17. The local unit went back to the P57 level when it finished at P57.97 on Oct. 28, causing it to strengthen by P0.655 or 1.13% from its Sept. 30 close of P58.625. 

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the low, single-digit growth in cash remittances in recent months may have been due to the strong US dollar, which “somewhat helped reduced the need to send US dollars to pay the same amount in pesos, especially after taking into account the effects of higher prices/inflation.”

“The continued growth in OFW remittances may be attributed to the relatively higher prices/inflation that may have required the sending of more remittances to cope with higher prices of goods and services for OFWs and their families in the Philippines,” Mr. Ricafort said.

Headline inflation accelerated to a near 14-year high of 7.7% in October, from 6.9% in September.

For the first 10 months of the year, cash remittances increased by 3.1% year on year to $26.736 billion.

The growth in cash remittances during the January-to-October period was driven mainly by inflows from the United States, Saudi Arabia, Singapore, and Qatar. 

By country source, the United States remained the biggest source of cash remittances at 41.7%. It was followed by Singapore (7%), Saudi Arabia (5.9%), Japan (5%), United Kingdom (4.8%), United Arab Emirates (4%), Canada (3.6%), Qatar (2.8%), Taiwan (2.7%), and Korea (2.5%).   

Remittances from the top 10 countries accounted for 80% of the total during the 10-month period.

“For the last three months at least, we saw remittances from the US — the largest sender — and Asia soften. This will likely be offset by increases from sea-based workers and remittances from the middle east,” Ms. Velasquez said. 

Meanwhile, BSP data showed personal remittances increased by 3.5% to $3.227 billion in October. This brought the 10-month tally to $29.718 billion, up by 3.1% from a year ago.

The BSP said the increase in personal remittances two months ago was due to higher remittances sent by land-based workers with work contracts of less than a year or more, and sea-based workers with work contracts of less than one year.

“OFW remittances and (dollar) conversion to pesos (are) expected to seasonally increase towards the end of 2022 in view of the seasonal increase in holiday spending,” Mr. Ricafort said.   

He noted holiday spending could be higher than the levels seen in 2020 and 2021, when strict lockdowns and travel restrictions were implemented.

The central bank expects remittances to grow by 4% this year.