OFW remittances up by 3.2% in August

Cash remittances from overseas Filipino workers (OFW) rose by an annual 3.2% in August, the Bangko Sentral ng Pilipinas (BSP) said.

Data from the central bank showed that cash remittances grew by 3.2% to USD 2.89 billion from USD 2.8 billion a year ago.

“The growth in cash remittances in August 2024 was due to the growth in receipts from land- and sea-based workers,” the BSP said in a statement.

Remittances from land-based workers increased by 3.9% year on year to USD 2.28 billion, while money sent by sea-based workers inched up by 0.7% to USD 603.216 million.

Month on month, cash remittances slipped from USD 3.08 billion posted in July.

Personal remittances, which include inflows in kind, increased by 3.3% to USD 3.2 billion in August from USD 3.1 billion a year earlier.

“The expansion in personal remittances in August 2024 was due to higher remittances from land-based workers with work contracts of one year or more and sea- and land-based workers with work contracts of less than one year,” the central bank said.

Remittances from workers with contracts of one year or more went up by 3.7% to USD 2.47 billion, while money sent home by workers with contracts of less than a year edged higher by 1.4% to USD 670 million.

EIGHT-MONTH PERIOD
In the January-August period, cash remittances expanded by 2.9% to USD 22.22 billion from USD 21.58 billion a year earlier.

“The growth in cash remittances from the United States, Saudi Arabia, United Arab Emirates and Singapore contributed mainly to the increase in remittances in January-August 2024,” the BSP said.

The United States accounted for nearly half or 41.3% of overall remittances in the first eight months. It was followed by Singapore (7%), Saudi Arabia (6.1%), the United Kingdom (4.9%) and Japan (4.8%).

Other sources of remittances were the United Arab Emirates (4.2%), Canada (3.5%), Qatar (2.9%), Taiwan (2.7%) and South Korea (2.6%).

Meanwhile, personal remittances increased by 3% to USD 24.74 billion as of end-August from $24.01 billion a year ago.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the steady growth in remittances is a “good signal” for the economy.

“Philippine remittances from overseas workers have consistently been the fourth largest in the world after India, Mexico and China, amounting to more than USD 40 billion per year — a sign of resilience — and has always been a bright spot for the Philippine economy for many years,” he said in a Viber message.

Mr. Ricafort noted that the stronger peso in August also contributed to the lower remittances on a month-on-month basis.

“For the month of August, the US dollar-peso exchange rate declined, mostly at PHP 56-57 levels, versus the PHP 58 levels in July 2024 that somewhat reduced the peso equivalent of OFW remittances and effectively partly increased the year-on-year growth in OFW remittances in recent months.”

The peso strengthened to PHP 56.111 a dollar on Aug. 30 from its close of PHP 58.365 on July 31.

Mr. Ricafort said he expects continued single-digit growth in remittances in the coming months amid the “normalization of spending by households for both essentials and nonessentials.”

The upcoming holiday season is also seen to drive remittance growth.

“Remittances are expected to increase during the holiday season after increased deployment of workers contributed [to the August growth],” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said.

The central bank expects cash remittances to grow by 3% this year. – Luisa Maria Jacinta C. Jocson, Reporter