Personal remittances sent by overseas Filipino workers (OFWs) grew 6.8 percent in January to $2 billion, a positive indication that the country’s current account is still in surplus
The Bangko Sentral ng Pilipinas said the steady growth was an indication of the strong overseas demand for Filipino labor.
Personal remittances represent the sum of net compensation of OFWs; personal transfers like all current transfers in cash or in kind by OFWs, as well as other household-to-household transfers between Filipinos abroad; and capital transfers between households
The BSP said OFWs sent $1.87 billion in January 2013.
The central bank attributed the robust growth in personal remittances to the steady increase in transfers of land-based workers with long-term contracts (4.9 percent), and sea-based and land-based workers with short-term contracts (9.1 percent).
”Remittance flows from overseas Filipinos remained resilient, underpinned by the sustained demand for Filipino manpower overseas, particularly the skilled workers,” the BSP stated.
However, on a month-on-month comparison, remittances in January were lower compared to the $2.4 billion recorded in December 2013, which was the time of holiday spending
Meanwhile, cash remittances from overseas Filipinos coursed through banks increased by 5.9 percent year-on-year to $1.79 billion from $1.69 billion level a year ago.
Cash remittances for the month were also lower compared to the $2.17 billion recorded in December 2013.
”It should be pointed out, however, that the level of remittances typically drops after the year-end holiday season,” the central bank explained.
The BSP data said that cash remittances from both land-based reached $1.3 billion, while cash remittances from sea-based workers amountedto $450 million.
United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, and Canada were the major sources of cash remittances.
”The solid growth of remittances is expected to provide support to the continued strength of the current account,” the BSP said.
The current account is one the component of the country’s balance of payments. It is the sum of the country’s net receipts from sales abroad of goods and services, overseas income and other current transfers, including remittances from OFWs.
Full year 2013 personal remittances reach $23.35 billion, while cash remittances amounted to $22.96 billion. This year, the BSP said that cash remittances may reach P23.6 billion growing by five percent.