GROWTH of remittances from overseas Filipino workers slowed in April from a month earlier, but grew at a faster pace year-on-year, data from the Bangko Sentral ng Pilipinas (BSP) showed on Wednesday.
Personal remittances—representing overseas Filipinos’ earnings, personal transfers in cash or in kind, and capital transfers between households—grew by 3.8 percent to $2.443 billion, lower than the $2.606-billion posted in March, but higher than the $2.353 billion posted in April 2015.
Cash remittances—money sent through banks—were also slightly lower in April, growing 4.1 percent in April to $2.213 billion, lower than the month-earlier total of $2.362 billion, but higher than the $2.126 billion in April 2015.
For the first four months of 2016, personal remittances were up 3 percent to $9.577 billion, the central bank reported. The growth rate was faster than the 2.7 percent rate recorded in March for the first quarter.
Funds coursed through banks for the January to April period also saw growth rising to 3.1 percent to $8.670 billion.
The United States, Saudi Arabia, the United Arab Emirates, Singapore, the United Kingdom, Hong Kong, Kuwait and Germany were the major sources of cash remittances.
“The sustained demand for overseas Filipino continued to provide support to the growth of remittance inflows,” the central bank said in a statement.
The central bank cited preliminary data from the Philippine Overseas Employment Administration (POEA) showing that 777,887 contracts were processed by end-April 2016.
In 2015, remittances rose to a record high of $28.483 billion. This year, the central bank is projecting a 4.0 percent growth in remittances.
To hit $27B
Singaporean bank DBS said that at the current pace, total remittances are likely to hit $27 billion for the full-year, which would be close to a 5 percent increase from last year.
“This is important on several fronts,” it said.
In particular, the bank noted that with the agriculture sector still under stress, remittance flows are crucial to prop up household spending in the rural areas.
“As a result, consumption growth is set to remain robust at 6.2 percent this year,” it said.
Furthermore, DBS said robust remittance flows also offset any drag on the external balance stemming from weak merchandise export growth.
“Not surprisingly, there have been few concerns about the peso despite worries of capital flight from the region,” it added.
Lastly, the foreign lender said that a point to note for President-elect Rodrigo Duterte is that while OFW remittances make up close to 9 percent of gross domestic product, it also highlights the need to continue develop the domestic economy.
The resurgence of the manufacturing sector in recent years has been one crucial development, it pointed out.
“The latest industrial output data in April continues to show double-digit growth in several major sectors. Even stronger growth in the manufacturing sector will work in favor of Duterte’s pro-jobs and pro-poor economic platform,” it added.