Cash remittances hit 7-month high at USD 3.18 billion in July

Filipinos abroad sent more money home in July, hitting a seven-month high as remittances from sea-based workers grew at a slightly quicker pace than those from land-based workers, the Bangko Sentral ng Pilipinas (BSP) said on Monday.

Cash remittances coursed through banks jumped by 3% to USD 3.179 billion in July from USD 3.085 billion in the same month a year ago, data from the central bank showed.

This marked the highest monthly remittance level since the USD 3.38 billion posted in December last year.

Month on month, remittances grew by 7% from USD 2.987 billion previously.

“The Philippines saw sustained growth in cash remittances in July of this year, with remittances from sea-based overseas Filipinos (OFs) increasing slightly faster than funds from land-based OFs,” the BSP said in a statement.

Money sent home by land-based workers made up the bulk of cash remittances in July, which went up by 3% year on year to USD 2.59 billion.

Remittances from sea-based workers rose by 3.1% year on year to USD 585 million in July.

“The peso’s relative weakness against the US dollar also encouraged higher remittances, as families received greater peso value,” Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines (UnionBank), said in a Viber message.

In July, the peso performed weaker at an average PHP 56.7523 per US dollar from the PHP 56.3586 recorded in June.

Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co., said in a Viber message that the remittances growth in July was also driven by the start of the school season which meant overseas Filipino workers (OFWs) sent more money to their families to pay for tuition fees and school supplies.

Mr. Ravelas said global job stability may have allowed sea-based workers to send home more money.

Mr. Asuncion said the increase in remittances by sea-based workers reflects “strong demand in the maritime sector, buoyed by stable global trade and the recovery of cruise operations.”

“Higher dollar-denominated wages and renewed contracts for seafarers contributed to this growth, underscoring the sector’s resilience and its role as a stabilizing force for overall remittance inflows,” he said.

Meanwhile, personal remittances, which include both cash coursed through banks and informal channels and in-kind remittances, climbed by 3.1% to USD 3.53 billion in July from USD 3.43 billion in the same month last year.

Most of the personal remittances that month came from workers with contracts of one year and above, amounting to USD 2.81 billion, up 3% from a year earlier.

Those with contracts of less than one year sent home USD 650 million, rising by 3.3% year on year.

Seven-month period

In the first seven months of the year, cash remittances from OFWs increased by 3.1% to USD 19.932 billion from USD 19.332 billion a year ago.

This as remittances sent by land-based workers rose by 3.3% to USD 15.97 billion during the period, while sea-based workers’ remittances inched up by 2.3% to USD 3.96 billion.

Filipinos in the United States accounted for 40.3% of the total cash remittances sent in the January-to-July period.

This was followed by OFWs in Singapore (7.1%), Saudi Arabia (6.2%), Japan (5%), the United Kingdom (4.8%), the United Arab Emirates (4.4%), Canada (3.4%), Qatar (2.9%), Taiwan (2.8%) and South Korea (2.7%).

Personal remittances in the first seven months reached USD 22.206 billion, up by 3.1% from USD 21.532 billion a year prior.

Mr. Asuncion said the upcoming holiday season will allow remittances to sustain its growth in the coming months.

“Looking ahead, remittances are expected to maintain an upward trajectory in the coming months, supported by seasonal inflows during the ‘-ber’ months and the holiday season,” he said.

However, the UnionBank economist also noted that global economic uncertainty and policy changes across the world pose risks to the country’s remittances growth.

“Nonetheless, steady overseas employment and a competitive peso should help sustain positive momentum,” he added.

The BSP expects cash remittances to grow by 2.8% to USD 35.5 billion this year. — Katherine K. Chan