OFW remittances slow down in January-July 2018
MANILA, Philippines – Overseas Filipino workers (OFWs) sent some $2.7 billion in July 2018, the Bangko Sentral ng Pilipinas (BSP) said on Monday, September 17.
The figure is 4.5% higher compared to the same month last year.
On a cumulative basis, remittances grew by 3% year-on-year to $18.5 billion.
The central bank attributed the rise in personal remittances to land-based workers with work contracts of one year or more (2.8%) and sea-based workers and land-based workers with short-term contracts (4%).
While the year-on-year cumulative growth rates were positive, a slowdown can be observed when the period is compared to previous years.
The same period in 2017 had a 5.9% increase. The years 2013 (7.4%), 2014 (8.9%), and 2015 (7.4%) also posted higher figures.
Meanwhile, cash remittances from OFWs coursed through banks amounted to $2.4 billion in July, up by 5.2% year-on-year.
For the first 7 months of 2018, cash remittances climbed to $16.6 billion, a 3% increase from the level registered in the same period in 2017.
Cash remittances from land-based and sea-based workers totaled $13.1 billion and $3.5 billion, respectively.
However, cash remittances also followed a similar slowdown like personal remittances when the same periods were compared to previous years.
The years 2013 (6.8%), 2014 (8.3%), 2015 (7.7%), and 2016 (5%) posted higher growth. Both personal and cash remittances posted a slowdown in 2016.
More than 79% of the total cash remittances came from the United States, Saudi Arabia, United Arab Emirates, Singapore, Japan, United Kingdom, Qatar, Canada, Germany, and Hong Kong.
Rappler columnist and UP School of Economics PhD candidate JC Punongbayan previously noted that weaker inflows of OFW remittances could hurt the Philippine peso. (READ: [OPINION] Why is the Philippine peso the weakest in ASEAN?)
He attributed the slowdown of remittances largely to global factors.
"The depression of global oil prices in 2014 and 2015 slowed down growth in Middle Eastern countries like Saudi Arabia, UAE, Qatar, and Kuwait, where a bulk of our OFWs work. In turn, this resulted in a steep decline of remittances, particularly between 2014 and 2015," Punongbayan said.
President Rodrigo Duterte's policies was also seen to affect remittances.
Remittances in March dropped by 10% after the repatriation of OFWs from Kuwait.
As of September 17, the peso has traded at the P54 level against the US dollar.
London-based research firm Capital Economics projected the currency to slide further to P55 this year, and trade at P58 against the dollar in 2019. – Rappler.com