OFW remittances beat expectations in 2016 to hit $29.7B
MANILA, Philippines – Wrapping up an upward trend seen all of last year, remittances sent home by overseas Filipino workers (OFWs) surpassed the expectations of the Bangko Sentral ng Pilipinas (BSP) in December to end 2016 on a record high.
BSP Officer-in-Charge Diwa Guinigundo announced on Wednesday, February 15, that full-year personal remittances for 2016 reached $29.7 billion, a 4.9% increase from the level in 2015. The amount also exceeded the BSP's official projected growth of 4.0% for the year.
That growth, the BSP noted, was driven mainly by the 7.6% increase in remittances from land-based workers with work contracts of one year or more, which totaled $23.2 billion. This offset the 3.7% decline in remittances from sea-based and land-based workers with work contracts of less than one year, which totaled $6.1 billion.
Full-year cash remittances, or money formally channeled through banks, also hit a record high of $26.9 billion and grew by 5.0% from 2015.
"The growth of cash remittances in 2016 continued to increase on the back of improving global economic conditions," Guinigundo said.
BSP data showed that remittances from the Middle East were the biggest gainer, increasing by 12.7%, driven by growth in remittances from Qatar, Kuwait, Oman, and the United Arab Emirates (UAE).
Remittances from Asia rose by 7.4%, buoyed mainly by flows from Singapore, Japan, China, and Taiwan.
Meanwhile, remittances from the Americas increased by 3.8%, with the United States being the major contributor at 6.2%.
Remittances from Europe, however, fell by 8% due to the decline in cash transfers from the United Kingdom. The BSP said the UK decline was partly because of the depreciation of the pound sterling against the US dollar. Besides the UK, flows from Italy and the Netherlands also fell.
Overall, more than 80% of the total remittances came from the US, Saudi Arabia, UAE, Singapore, UK, Japan, Qatar, Kuwait, Hong Kong, and Germany.
Remittances over the holidays
Part of the momentum was driven by record remittances in December alone, traditionally the strongest time of the year for these flows due to the holidays.
Personal remittances for the month hit a new record high of $2.8 billion, posting a year-on-year growth of 3.6%.
Cash remittances also hit a record $2.6 billion for the month, representing a 3.6% increase year-on-year. The US, Qatar, and Japan were the top 3 main sources.
The BSP said personal remittances continue to be crucial for domestic demand and represented 8.1% of the country's gross national income (GNI) and 9.8% of the gross domestic product (GDP) for 2016.
For 2017, the central bank has kept the same projection of 4.0% growth. – Rappler.com