RemJttances up for 4th straJght month
MONEY sent home by Filipinos working abroad rose by 13% in May, the fastest in nearly five years, as the global economy’s recovery picked up steam amid the pandemic.
Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed cash remittances from overseas Filipinos reached $2.382 billion in May, up 13% from the $2.106 billion in the same month last year. This was the quickest growth rate since the 18.5% uptick logged in November 2016.
May also marked the fourth consecutive month of remittance growth since January’s 1.7% contraction.
Month on month, cash remittances by overseas Filipino workers (OFWs) inched up 3.34% from the $2.305 billion recorded in April.
The higher remittances were mainly due to the 16% rise in receipts from land-based OFWs to $1.894 billion in May. Sea-based workers sent home $488 million, up 2.7% year on year.
To date, cash remittances grew by 6.3% to $12.28 billion from January to May, against the $11.554 billion recorded in the same period last year.
The BSP noted there was an increase in remittances from the United States (US), Malaysia, South Korea, Singapore, and Canada.
“Jobs [were] slowly returning as developed economies reopen. Filipinos working overseas send more funds to offset lost income from affected family members/higher expenses at home,” BDO Unibank, Inc. Chief Market Strategist Jonathan L. Ravelas said in a Viber message on Tuesday.
The US remained the largest source of remittances, followed by Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, South Korea, Qatar, and Taiwan. Around 78% of the overall cash remittances came from the top 10 countries.
OFW workers benefited from improving recovery prospects in the US and a rebound in oil demand, helping them to send more money back home, Security Bank Corp. Chief Economist Robert Dan J. Roces said on Tuesday.
“However, downside risks remain with the Delta variant and the threat of new lockdowns,” he said.
A low base in 2020 also helped lift the remittance data, as many OFWs lost their jobs and were repatriated during the pandemic, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a note on Tuesday.
“However, the relatively lower base would start to fade and could mathematically even result in some modest year-on-year rise or even year-on-year declines starting June 2021,” he said.
Meanwhile, BSP data showed personal remittances — which also accounted inflows in kind — jumped by 13.3% to $2.652 billion in May from $2.341 billion a year ago. This brought the five-month tally to $13.68 billion, up 6.6% from $12.835 billion a year ago.
Mr. Roces said OFW remittances should remain resilient, just like what happened in 2020 when it posted a softer-than-expected contraction.
OFWs struggled to send money to their families in the Philippines amid the pandemic.
“Gains should help prop up household consumption in the months ahead to contribute to the recovery,” he said.
Mr. Ricafort said OFW remittances should pick up further on a faster global economic recovery as more countries lift their quarantine restrictions and their vaccination programs gain traction.
BSP projects cash remittances to grow by 4% this year after the 0.8% decline in 2020.