Remittances start year 2.7% higher at $3.15B

OVERSEAS Filipino worker (OFW) remittances rose by 2.7 percent to $3.15 billion in January from $3.07 billion a year earlier, the Bangko Sentral ng Pilipinas (BSP) reported late on Friday.

Money sent home via banks alone totaled $2.84 billion, also 2.7 percent higher compared to the $2.76 billion recorded in January last year.

The rise in overall or personal remittances was attributed to land-based OFWs with contracts of a year or more and sea- and land-based workers with contracts of less than one year.

The 2.7-percent growth in personal and cash remittances, however, was lower than the 3.5 percent recorded for both a year earlier.

Remittances also fell from December last year, when the overall amount hit $3.62 billion, due to seasonal factors — OFWs send home more money given the Christmas and New Year holiday season.

The growth in cash remittances at the start of 2024 was traced to flows from the United States, Saudi Arabia, the United Arab Emirates and Singapore.

The US accounted for the biggest share (41.8 percent) for the month, followed by Singapore (7.3 percent), Saudi Arabia (6.0 percent) and Japan (5.8 percent).

Other countries that contributed to overall remittances were the United Kingdom (4.8 percent), the UAE (3.3 percent), Canada (3.1 percent), Taiwan (2.8 percent), Qatar (2.7 percent) and Malaysia (2.4 percent).

Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that while remittance growth had moderated, it remained a positive indicator for the broader economy, particularly for consumer spending.

“For the coming months, modest growth in OFW remittances could continue as OFW families still need to cope with relatively higher prices locally,” he added.

Slowdown risks, Ricafort continued, could come from an economic downturn “or even recession in the US, as well as in other countries that host a large number of OFWs,” particularly if these lead to job losses.

Amid high inflation and a weak global economy, OFW remittances still hit a record $37.2 billion last year, up 3 percent from the $36.14 billion in 2022 and accounted for about 8.5 percent of gross domestic product.

Cash remittances totaled $33.5 billion, 2.9 percent higher than the year-earlier $32.54 billion.