9.4% year-on-year growth fastest since March
Overseas Filipino workers (OFWs) sent home $2.8 billion in August, the Bangko Sentral ng Pilipinas reported on Monday, with year-on-year growth of 9.4 percent the fastest pace seen in five months.
The personal remittances — also higher compared to July’s $2.55 billion — pushed the year to date tally to $20.72 billion, up 6.4 percent from a year earlier.
“The increase in personal remittances was driven largely by the sustained inflow of transfers from land-based workers with work contracts of one year or more (at $16.0 billion) and remittances from sea-based and land-based workers with work contracts of less than one year (at $4.2 billion),” the BSP said in a statement.
Personal remittances sum up the net compensation of OFWs, personal transfers whether in cash or in kind and also capital transfers between households.
Cash remittances, which only count money sent home via banks, totaled $2.49 billion in August, up 7.8 percent year-on-year.
“By country source, the primary contributors to the rise in cash remittances during the month are the United Arab Emirates (UAE), United States, Singapore and Qatar,” the central bank said.
Year-to-date, cash remittances grew by 5.4 percent to $18.59. billion.
The Bangko Sentral said the continued remittance influx was observed from both land-based workers ($14.7 billion) and sea-based workers ($3.9 billion), which saw 6 percent and 3.2 percent growth, respectively.
The bulk of cash remittances came from the US, Saudi Arabia, the UAE, Singapore, Japan, the United Kingdom, Qatar, Kuwait, Germany and Hong Kong.
An ING Manila economist said the latest remittances results boded well for domestic spending and the peso, which is currently trading above P51:$1.
“This would keep PHP (Philippine peso) on the defensive bias. A hawkish BSP would moderate the weakening bias. We still expect a BSP pre-emptive tightening this December especially if inflation continues to rise,” ING Manila senior economist Joey Cuyegkeng said.
“The pre-emptive move would likely stabilize inflation expectations … BSP action [will]support our year-end forecast of P51,” he added.