June remittances rise 3.7% to six-month high

MONEY SENT home by Filipinos abroad grew faster in June to hit a six-month high, driven by remittances from land-based workers, the Bangko Sentral ng Pilipinas (BSP) said.

Cash remittances coursed through banks jumped by 3.7% year on year to $2.99 billion in June from $2.88 billion, the BSP said on Friday.

This was the highest value of monthly remittances seen in six months or since the $3.38 billion logged in December last year.

The year-on-year increase also picked up from the 2.9% logged in May, when remittances reached $2.66 billion.

“Cash remittances to the Philippines continued to grow in June of this year, with remittances from land-based overseas Filipinos (OFs) increasing faster than funds from sea-based OFs,” the central bank said.

Money sent home by land-based overseas Filipino workers (OFWs) climbed by 3.7% year on year to $2.43 billion in June, making up bulk of the total.

Remittances from sea-based OFWs also rose by 3.5% to $555 million that month.

“The increase in cash remittances drove an increase in personal remittances as well,” the BSP said.

Personal remittances, which include both cash coursed through banks and informal channels and in-kind remittances, climbed by 3.7% to $3.33 billion in June from $3.21 billion a year prior.

Workers with contracts of one year and above logged personal remittances worth $2.63 billion, up 3.6% year on year, while those with contracts of less thn one year sent home $610 million worth of cash and items, jumping by 3.9% from the previous year.

FIRST HALF
For the first semester, cash remittances from migrant Filipinos went up by 3.1% to $16.75 billion from the $16.25 billion recorded in the comparable year-ago period.

Money sent home by land-based workers rose by 3.3% year on year to $13.38 billion in the six months through June, while sea-based OFWs’ remittances increased by 2.2% to $3.38 billion.

The United States remained as the top source of cash remittances in the first half, accounting for 40.1% of the total.

This was followed by Singapore (7.1%), Saudi Arabia (6.2%), Japan (5%), the United Kingdom (4.9%), the United Arab Emirates (4.3%), Canada (3.3%), Qatar (2.9%), Korea (2.8%) and Taiwan (2.7%).

Meanwhile, personal remittances in the January-to-June period reached $18.67 billion, up by 3.1% from $18.1 billion a year prior.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said the increase in cash remittances was “driven by sustained demand for Filipino workers abroad and improved remittance channels.”

“The growth was led by land-based workers, particularly in the Middle East and North America, where labor markets remain robust,” Mr. Asuncion said.

“It reflects continued resilience in global labor markets, especially in the US and Middle East, as well as seasonal boosts tied to school enrollment and mid-year expenses,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, likewise said.

He added that stronger exchange rates in destination countries may have encouraged overseas Filipinos to send more money back home.

The peso traded at the P55 to P57 levels against the US dollar in June, depreciating sharply mid-month as Israel and Iran exchanged attacks, with the US also joining the conflict later on before a temporary ceasefire was reached. However, the greenback’s strength that month was capped by dovish US Federal Reserve bets.

The BSP expects cash remittances to grow by 2.8% this year. — Katherine K. Chan