February remittances steady
MONEY sent home by overseas Filipino workers (OFWs) steadied at the $2-billion level in February, riding on a surge in remittances from the United States as the dollar continued to strengthen, the central bank announced yesterday.
Cash remittances logged $2.169 billion that month, matching January’s inflows and rising by 3.4% from the $2.098 billion tallied in February 2016. Monthly remittances have remained above $2 billion since a year ago.
In a statement, the BSP said more than three-fourths or $1.7 billion of the total were sent by land-based OFWs. The remaining fourth came from those working at sea which has been on a decline in recent months.
February inflows brought the two-month tally to $4.338 billion, which is 5.9% more than the $4.095 billion recorded in the same period in 2016.
OFWs working in the US remained the biggest source of remittances, which soared by 12.8% to $720.879 million and accounted for 16.6% of the total haul, according to central bank data.
Other major sources of cash inflows were Saudi Arabia ($206.269 million), the United Arab Emirates ($170.035 million), Singapore ($145.614 million), and the United Kingdom ($111.137 million).
Strong inflows from these countries helped offset lower remittances from Hong Kong, Canada, China, and Kuwait, the BSP said in a statement.
Sought for comment, two analysts said OFWs likely took note of the weaker peso in February in deciding the amounts which they sent to their families back in the Philippines.
“The growth in remittances might partly be driven by the peso’s depreciation, which may have urged some OFWs to send more money back home in order to take advantage of the higher dollar to peso conversion factor,” Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines, said in an e-mail interview.
The rebound in oil prices may have also boosted employment and incomes from those working in the Middle East, Mr. Dumalagan added, alongside steady economic recovery in the US and Japan that armed more Filipinos with more money to remit.
The peso breached the P50 level versus the dollar starting Feb. 17, ahead of a widely anticipated March rate hike by the US Federal Reserve.
The local unit traded weaker than P50 against the greenback over a month, before returning to the P49 mark last week.
The BSP expects remittances to grow by four percent this year, although officials have said they will likely revise forecasts for 2017 in the wake of last year’s record. Remittances logged a record-high $26.9 billion in 2016, five percent more than the previous year’s $25.607 billion which beat the central bank’s expectations.
Angelo B. Taningco, economist at Security Bank Corp., said remittances will likely grow faster this year: “I still think full-year remittance growth of at least six percent is attainable on the back of positive growth in major economies that are major sources of remittances as well as peso depreciation and higher inflation in the domestic economy.”
Personal remittances — cash and in-kind transfers from OFWs to their families back home — accounted for nearly a tenth of gross domestic product in 2016.