OFW remittances see highest growth in over two years
MANILA, Philippines – Money sent home by overseas Filipino workers (OFWs) in August saw the highest growth in over two years and a rebound from a month ago, according to data from the Bangko Sentral ng Pilipinas (BSP).
The increase was mainly driven by fund transfers for enrollment in the new school year.
BSP Officer-in-Charge Nestor Espenilla said in a statement on Monday, October 17, that personal and cash remittances in August both increased by 16% year-on-year.
Personal remittances grew to $2.6 billion.
This is the highest growth since March 2014's 16.9%, and a rebound from a 5.4% decline in July 2016.
"The rebound validates that the recent slip in remittances was a mere reporting issue and the shift in school year calendar, causing year-on-year numbers to shift from weakness to gains to contraction back to gains as seasonality is adjusting," Bank of the Philippine Islands (BPI) associate economist Nicholas Antonio Mapa said in an e-mail.
August personal remittances also brought the year-to-date figures up 4.4% at $19.482 billion.
The BSP said personal remittances were comprised largely of transfers from land-based workers with work contracts of one year or more (at $15.1 billion) and remittances from sea-based and land-based workers with work contracts of less than one year (at $4.1 billion).
Meanwhile, cash remittances, or transfers coursed through banks, went up by 16.3% to $2.319 billion, bringing the year-to-date volume higher by 4.6% to $17.642 billion, BSP data showed.
"The school-year shift forced the migration of remittances usually sent in one month to the next month with classes shifting opening schedules," Mapa said.
According to BSP data, about 80% of cash remittances came from the United States, Saudi Arabia, the United Arab Emirates, Singapore, the United Kingdom, Japan, Qatar, Kuwait, Hong Kong, and Germany.
For the next few months, BPI's Mapa said the Philippines will continue to see remittance numbers fluctuate from month to month, but the year-to-date growth numbers are expected to remain in decent growth ranges.
"Also expect sourcing of remittances to shift as BSP is better able to vet which remittances are sourced from which domicile. We may however see a slower pace in the growth of remittances towards year-end as [Filipinos abroad] adjust dollar wire transfers given the weaker peso," Mapa said. – Rappler.com