Remittances jump 3.3% in November

Money sent home by overseas Filipino workers (OFW) rose by an annual 3.3% in November amid the peso depreciation against the US dollar, the Bangko Sentral ng Pilipinas (BSP) said.

Data from the central bank showed that cash remittances coursed through banks grew by 3.3% to USD 2.81 billion in November from USD 2.72 billion in the same month a year ago.

However, the amount of remittances in November was the lowest in six months or since the USD 2.58 billion posted in May.

Month on month, cash remittances declined by 8.7% from USD 3.08 billion posted in October.

BSP data showed remittances from land-based workers jumped by 3.9% year on year to USD 2.22 billion in November, while money sent by sea-based workers inched up by 1% to USD 585.505 million.

Meanwhile, personal remittances, which include inflows in kind, increased by 3.5% to USD 3.12 billion in November from USD 3.02 billion a year earlier.

Remittances from workers with contracts of one year or more rose by 3.7% to USD 2.4 billion, while money sent home by workers with contracts of less than a year edged higher by 1.7% to USD 650 million.

11-month period

In the January-to-November period, cash remittances climbed by 3% to USD 31.11 billion from USD 30.21 billion a year earlier.

“Cash remittances are projected to increase by 3% for the full-year 2024,” the central bank said.

The end-November remittances accounted for 90.2% of the BSP’s full-year projection of USD 34.5 billion.

“The growth in cash remittances from the United States, Saudi Arabia, Singapore, and the United Arab Emirates (UAE) contributed mainly to the increase in remittances in January-November 2024,” the central bank said.

“In terms of country sources, the US accounted for the largest share of overall cash remittances January-November 2024, followed by Singapore and Saudi Arabia.”

The United States accounted for 40.9% of overall remittances in the 11-month period, followed by Singapore (7.1%), Saudi Arabia (6.3%), Japan (5%) and the United Kingdom (4.7%).

Other top sources of remittances were the UAE (4.4%), Canada (3.5%), Qatar (2.9%), Taiwan (2.8%) and South Korea (2.5%).

Personal remittances likewise expanded by 3% to USD 34.61 billion as of end-November from USD 33.59 billion a year ago.

Analysts said the recent peso depreciation may have affected cash remittances during the month.

“For the month of November, the US dollar-peso exchange rate mostly ranged at P58-59 levels versus the P56-58 levels in the previous month that somewhat increased the peso equivalent of OFW remittances,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

Mr. Ricafort said this would “reduce the sending of more OFW remittances denominated in US dollars/other foreign currencies to pay for the same amount in pesos.”

The peso closed at P58.62 against the dollar at the end of November, weakening by 52 centavos from its P58.10 finish as of end-October.

The local unit also fell to the record low P59-a-dollar level twice during the month.

“The peso experienced a depreciation, indicating more pesos for the same foreign currency,” Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University, said.

“Remittances are mainly by recipients used to meet their basic needs. The sender may have figured out that they don’t need to send more of their money to meet the needs of their family here,” he added.

Mr. Ricafort also added that the higher cost of living in OFWs’ host countries could have reduced remittances sent home.

For December, Mr. Ricafort said that remittances likely rose amid the holidays.

“OFW remittances could go up in December in view of the expected seasonal surge during the Christmas and New Year holiday season, the biggest spending by households in a typical year,” he said.

The central bank expects cash remittances to grow by 3% in 2024 and 2025. – Luisa Maria Jacinta C. Jocson, Reporter