Personal remittances by overseas Filipino workers (OFWs) rose 5.8 percent year-on-year in June, marking the highest inflow in six months as demand for skilled Filipinos abroad remained stable.
Bangko Sentral ng Pilipinas (BSP) data showed that personal remittances increased to $2.41 billion in June from $2.27 billion in the same month last year.
OFW remittances in June stood at the highest level since December 2014, when the amount reached $2.56 billion.
Total remittances for the first six months of 2015 grew 5.3 percent to $13.37 billion from $12.7 billion recorded in the year-ago period.
The central bank data also showed that growth in remittances in June reflected an improvement from the 5.5 percent rise seen in May.
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.
Cash remittances, or those coursed through banks, rose 6.1 percent year-on-year to $2.18 billion in June from $2.05 billion in the comparative period.
A breakdown of remittances during the first half shows funds coursed through banks climbed to $12.08 billion, or 5.6 percent more than the amount sent in the same period last year.
Data from the central bank showed cash remittances from land-based and sea-based Filipinos reached $9.2 billion and $2.8 billion, respectively.
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 six-month period.
The BSP said “strong remittance inflows were supported by the continued initiatives of bank and non-bank remittance service providers to expand their international and domestic coverage, and the introduction of innovations in their remittance products.”
In a research note, United Kingdom-based investment bank Barclays said the increase in remittances remains satisfactory, while its converted value may have risen because of the weak Philippine peso.
Focusing on funds coursed through banks, Barclays noted that for first half of 2015, the 5.6 percent year-on-year improvement was slightly less than the 6.9 percent growth pace during the same six-month period in 2014.
“With remittances reported in US dollars, flows continue to be weighed [down]by the near 20 percent decline in euro-dollar [exchange rate]over the past year, and increasingly may be weighed down by weakness in regional currencies,” it said.
Nevertheless, the recent weakness in the local currency should help boost private consumption through the remittances channel, the investment bank said.
“While headline remittances growth may be modest, the weaker Philippine peso implies that the converted value of remittances is likely to be higher, which should support activity in the second half of the year,” it said.
As of end-June this year, commercial banks’ established tie-ups, remittances centers, correspondent bank and branches/representative offices abroad have expanded by 18 percent to 5,541 from 4,675 a year earlier, the central bank reported.
Meanwhile, data from the Philippine Overseas Employment Administration showed that there were 454,263 approved job orders in the first six months of 2015.
Of the total job orders, 37.8 percent of those processed were intended for service, production, and professional, technical and related workers in Saudi Arabia, Kuwait, Qatar, Taiwan, and the United Arab Emirates.
In 2014, personal remittances set an all-time high of $24.96 billion, while cash remittances reached $24.34 billion.