Personal remittances by overseas Filipino workers (OFWs) remittances grew 4.9 percent year-on-year in April but lost its momentum from the growth pace seen in March and a year earlier.
Bangko Sentral ng Pilipinas (BSP) data shows OFW personal remittances reached $2.23 billion in April against $2.12 billion in the same month last year.
This brought the total remittances for the first four months to $8.64 billion, up 5.1 percent from the $8.22 billion recorded in the same period in 2014.
Although the value of personal remittances was higher in April this year than from a year ago, the growth rate still showed an easing from 11 percent in March and 5.4 percent in the year-earlier period.
Personal remittances consist of net compensation for land-based overseas workers with short-term (one year or less) contracts and all sea-based workers; personal transfers in cash or in kind between overseas Filipinos or longer-term overseas workers and their families in the Philippines; and capital transfers between households, such as funds for home construction.
Impact of weak euro
Analysts at a UK-based investment bank said the weak euro has been a drag on remittances.
In a commentary following the release of April OFW remittances data, the Barclays analysts said remittances in April continue to be weighed by the near 20 percent decline in euro versus the US dollar over the past year.
The bank believes the bulk of remittances weakness is because of currency translation effects.
“Indeed, the Philippine Overseas Employment Administration continues to report strong growth in job orders, suggesting no fall in demand for overseas workers. As such, while the weak EUR could weigh further on remittances growth, we expect this to prove transitory,” they pointed out.
Barclays analysts also stressed that the weakness in remittance flows from Europe, alongside other regions with weaker currencies, could pose some headwinds for the country’s private consumption growth this year.
However, the analysts expects the central bank to look through the transitory nature of the scenario, given the Philippines’ broadly strong domestic demand.
Growth of cash remittances slows
Meanwhile, cash remittances, or those coursed through banks, rose 5.1 percent year-on-year to $2.01 billion in April from $1.91 billion a year earlier.
A breakdown of remittances during the four-month period shows funds coursed through banks increased to $7.80 billion, or 5.4 percent over the amount sent in the same period last year.
The central bank noted that cash remittances during the period from land-based and sea-based Filipinos reached $5.9 billion and $1.9 billion, respectively.
“The steady demand for skilled Filipino manpower overseas provided support to the continued growth in remittance inflows,” the BSP said in a statement released along with the figures.
The central bank added that the continued efforts of bank and non-bank remittance service providers to expand their international and domestic market coverage, and introduce innovations in financial products and services in the remittance market contributed to the sustained inflow of remittances.
The United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, Hong Kong and Canada were the major sources of the cash remittances for the four-month period.
In terms of overseas jobs, data from the Philippine Overseas Employment Administration showed that there were 310,727 approved job orders in the first four months of 2015.
Of the total job orders, 33.8 percent were processed intended for service, production, and professional, technical and related workers in Saudi Arabia, Kuwait, Taiwan, Qatar and the United Arab Emirates.
In 2014, personal remittances set an all-time high of a total $24.96 billion, while cash remittances reached $24.34 billion.