Sept. remittances smaller; year-to-date flows up
MONEY SENT HOME by Filipinos abroad dropped in September to a five-month low as Saudi Arabia sent more overseas Filipino workers (OFWs) back home under an extended repatriation program, the central bank reported yesterday, although year-to-date flows were still bigger than a year ago.
OFW remittances totalled $ 2.186 billion that month, slipping by 8.3% from the year-ago $2.383 billion, the Bangko Sentral ng Pilipinas (BSP) said.
September inflows were the smallest since April’s $2.083 billion remittances and reflected the
steepest fall in over a decade since a 10.9% drop in April 2003.
The BSP said remittances from land- based workers slipped by 11.7%, offseting a six percent increase in money sent by those working at sea.
The decline was largely due to lower amounts sent by those based in Saudi Arabia, which saw thousands of Filipinos suddenly head home.
“[T]he decline in remittances could partly be the result of the continued repatriation of overseas Filipino workers under the Saudi Arabian Amnesty Program which started last March 2017,” the central bank said in a statement, noting that the repatriation program has been extended effective Sept. 26.
Citing data from the Department of Foreign Affairs, the central bank said that a total of 8,467 undocumented OFWs availed of the program, which allowed them to return to the Philippines without penalty from the foreign government.
The BSP also attributed the drop in remittances to terminated arrangements between global banks and money service businesses, with more of the former choosing to end correspondent banking relationships in the face of perceived increased risks.
Despite the slip in September remittances, the nine-month tally still grew to $20.781 billion, up by 3.8% from the $20.025 billion posted during the same period in 2016.
However, this was below the central bank’s forecast of a four percent growth for the entire year.
The United States remained the biggest source of remittances between January and September worth $6.963 billion, accounting for a third of the total.
Saudi Arabia came second with $1.895 billion, although 3.5% less than last year due the repatriation of illegal workers.
Other major sources of funds were the United Arab Emirates ($1.874 billion), Singapore ($1.311 billion), Japan ($ 1.084 billion), and the United Kingdom ($1.002 billion), the BSP said.
Remittances support household consumption, which drives more three-fifths of national economic output.
Yesterday’s data bared a 1.976% year- on-year increase in cash remittances in the third quarter, slightly faster than the second quarter’s 1.856% hike but still much slower than January-March’s 7.682%.
The central bank’s September remittance report came a day ahead of the Philippine Statistics Authority’s scheduled thirdquarter gross domestic product report today. A Business-World poll of economists yielded a 6.6% median forecast for the quarter, fueled by robust consumption and improving public spending.