Nov. remittance growth fastest in over 8 years

CASH REMITTANCES surged ahead of the holidays in November last year at the fastest pace in over eight years, the Bangko Sentral ng Pilipinas (BSP) reported yesterday, taking the year-to-date tally closer to the central bank’s estimate for 2016.

Money sent home by overseas Filipino workers (OFWs) reached $ 2.217 billion for the month, climbing 18.5% from a year-ago $1.871 billion.

The double- digit increase is the biggest since a 24.6% rise clocked in July 2008, according to central bank data.

Remittance flows recovered from a 3% year-on-year decline recorded in October last year and a 6.2% slide posted in November 2015.

November’s remittances brought the 11- month total to $24.341 billion, 5.2% more than the $23.137 billion sent home by OFWs during the comparable year-ago period.

Such inflows were also on track to hit the central bank’s $26.3-billion forecast for the entire 2016.

If realized, this would reflect a four percent growth from 2015’s $25.607-billion haul.

GLOBAL CONDITIONS ‘IMPROVING’

“The improving global economic conditions, particularly in the US, may have contributed to the overall growth in remittances,” the BSP said in a statement yesterday.

Funds remitted by land-based OFWs rose by $1.4 billion from a year ago, which helped offset a $ 200- million decline in the amounts sent home by those working at sea, the central bank said in a statement.

Filipinos working in the United States remained the biggest source of remittances, sending home some $8.067 billion in those 11 months, accounting for roughly a third of the total.

Other top sources of remittances were Saudi Arabia ($2.397 billion), the United Arab Emirates ($ 1.938 billion), Singapore ($1.506 billion), the United Kingdom ($ 1.282 billion) and Japan ($1.235 billion), according to BSP data.

SEASONAL STRENGTH

Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines, said the pickup in remittances was expected ahead of the Christmas celebrations, and as OFWs took advantage of the weaker peso to get more bang for the buck.

“The surge in OFW remittances in November 2016 might have been brought about by higher spending needs in preparation for the Christmas season,” Mr. Dumalagan said.

“The depreciation of the peso might have also enticed OFWs to send their money home, as lower peso rates would allow them to convert each dollar to more units of the local currency.”

Looking ahead, the economist said the central bank’s forecast for the year is “within reach,” as remittances were likely to have surged further in time for the holidays. “December 2016’s remittances are expected to be at least as high as December 2015’s level of $ 2.470 billion. Remittances usually rise in December to reach its highest monthly level during the year. This is trend is true since at least 2011,” he said.

Bigger remittances would also have fueled consumer spending in the fourth quarter, in turn driving overall economic growth faster, Mr. Dumalagan added.