MONEY sent home by overseas Filipinos workers (OFWs) grew at a slower pace in February to $2.397 billion, which an analyst said was still a good sign for the economy.
Bangko Sentral ng Pilipinas (BSP) data showed that personal remittances rose 3.3 percent in February 2017 from $2.320 billion a year ago. The BSP also recorded a slight growth from the January level of $2.396 billion.
The rate of annual increase in February was significantly slower compared with the 8.3 percent and 8.5 percent growth recorded the year previous and the month earlier.
For the first two months of the year, remittances reached $4.79 billion, up 5.9 percent from $4.52 billion a year earlier.
Personal remittances are transfers in cash or in kind, as well as capital transfers between households.
Although the total value of overseas remittances in February was only 3.3 percent up from the same period a year ago, this showed that remittances were resilient amid a Middle East slowdown last year, an analyst said.
“Given January remittances normally spike due to the holiday season, the value of remittances in February showed considerable resilience and remained at around the same value as the January figure,” IHS Markit senior economist Rajiv Biswas explained.
With world economic growth expected to accelerate in 2017 and economic conditions in key Gulf oil-producing nations such as Saudi Arabia and United Arab Emirates (UAE) improving, remittances from the Middle East should get a boost in 2017, he said.
“Overall, worker remittances are expected to show moderate positive growth momentum in 2017 and continue to be a key driver for domestic consumption and GDP (gross domestic product) growth,” he said.
A Land Bank of the Philippines economist said the growth in remittances might have partly been driven by the peso’s depreciation.
LandBank’s Guian Angelo Dumalagan said the weaker peso “may have urged some OFWs to send more money back home in order to take advantage of the higher dollar to peso conversion factor.”
BSP data showed that the peso-dollar rate averaged at P49.96:$1 in February, weaker than the P49.73:$1 in January and the P47.63:$1 a year earlier.
Dumalagan added that the steady recovery of the US and Japanese economies likely provided more income opportunities to Filipinos working in these countries, resulting in higher cash remittances.
“In the same manner, the rebound in oil prices might have also contributed to higher cash inflows by providing more employment to Filipinos settling in oil-producing countries like UAE and Qatar,” he said.
The LandBank economist said a 6 percent growth in remittances was reasonable given better prospects for the global economy this year.
Cash remittances coursed through banks totaled $2.169 billion in February, up 3.4 percent from $2.098 billion in 2016. In January, cash remittances also totaled $2.169 billion.
“More than three-fourths ($1.7 billion) of this was sent by land-based workers while less than a quarter ($500 million) of this was sent by land-based workers,” the BSP said.
By country source, the bulk of cash remittances came from the United States, the UAE, Qatar, Singapore, Taiwan and Japan.
“The 12.8-percent growth in remittances from the United States contributed 3.9 percentage points to the overall growth in cash remittances,” the BSP added.
Meanwhile, remittances from UAE, Qatar, Singapore, Taiwan and Japan grew by 23.7 percent, 53.5 percent, 17.5 percent, 64.4 percent and 11.3 percent, respectively.
Partially offsetting this were declines in remittances from Hong Kong, Canada, China and Kuwait, the BSP said.
Cash remittances for the first two months of 2017 totaled $4.3 billion, up by 5.9 percent compared with the same period last year.