September cash remittances highest for the year, so far; but growth slows

MONEY SENT HOME by overseas Filipino workers (OFWs) continued growth in September to post the highest level for the year, so far, though at a slower pace than in August, the central bank reported yesterday.

September’s tally means the inflows are on track to hit the central bank’s full-year forecast.

Cash remittances totaled $2.383 billion for the month, rising 2.8% from the $2.319 billion seen in August and by 6.7% from the $2.234 billion tallied a year ago, data from the Bangko Sentral ng Pilipinas (BSP) showed.

September remittances posted the biggest monthly level for the year so far, though below the record-high $2.47 billion inflows logged in December 2015.

September’s growth, however, was slower than the 16.3% climb seen in August, which was attributed to base effects.

“Overseas remittances increased in anticipation of the holiday season and also because of the growing US economy. More Filipinos are getting higher incomes and, therefore, are able to send more — a windfall for the Filipinos from stronger US economy,” Emmanuel A. Leyco, public finance professor at the Asian Institute of Management, said in a mobile phone message.

“We can expect stronger remittances especially as the holiday season comes closer.”

Monthly remittances have so far remained at the $ 2- billion level since February.

Leading the higher cash receipts is an 11.9% surge in money from land- based OFWs that month, which offset a 10.5% slide in the amounts sent home by those working at sea.

“The declining remittances from sea-based workers may be attributed to stiffer competition in the supply of seafarers. A growing number of officers and ratings are recruited from East Asia (China and India) and Eastern Europe ( Ukraine, Croatia and Latvia),” the BSP said in a statement.

Still, the September print brought nine- month inflows to $20.025 billion, 4.8% above the $19.103-billion recorded during the comparable period last year, and closer to the central bank’s $26.3-billion projection for 2016.

If realized, 2016 remittances would breach the record $25.767 billion level in 2015, which was 4% higher than the $24.628 billion seen the year prior.

The first nine months saw remittances from land- based workers grow 7.1% to $ 15.8 billion, against a 2.9% slide from sea-based OFWs to $4.2-billion.

The United States remained the biggest source of remittances at $ 6.596 billion, or roughly a third of total inflows. Other top remittance sources include Saudi Arabia ($1.963 billion), the United Arab Emirates ($1.591 billion), Singapore ($ 1.27 billion), the United Kingdom ($1.048 billion), and Japan ($1.008 billion).

Economists have flagged the looming presidency of Donald J. Trump in the US as a risk to remittances, owing to protectionist statements the Republican candidate made during the campaign. Mr. Trump championed an “America first” policy in his public speeches running up to the Nov. 8 polls, saying he would drive away immigrants in order to free up jobs for US nationals. Moody’s Investors Service said that US anti-immigrant policies would be “credit negative” for the Philippines, being a country “highly dependent” on remittance inflows. —