Remittances up 3.6% in ’22, slowest full-yr growth since ’20
REMITTANCES sent by overseas Filipinos may have grown due to the need of their families to cope with high inflation and be merry during the Christmas holidays in December, according to local experts.
The Bangko Sentral ng Pilipinas (BSP) full-year 2022 cash remittances coursed through banks amounted to $32.54 billion, up by 3.6 percent from the $31.42 billion recorded in 2021. However, this is the slowest full-year growth recorded since the onset of the pandemic in 2020.
In December, cash remittances coursed through banks grew by 5.8 percent to $3.16 billion in December 2022, from $2.99 billion registered in the same month in 2021.
“It’s double purpose, I think. One is to fight off the effects of higher prices and to maintain the ‘happiness’ surrounding the holidays. We all know how Pinoys are when they have money to spend especially if this December has been the ‘most open’ December in the last three years,” Unionbank Chief Economist Ruben Carlo O. Asuncion told Businessmirror.
RCBC Chief Economist Michael Ricafort agreed and said guidelines released by the government that eased restrictions, such as voluntary wearing of face masks outdoors, have contributed to the confidence of Filipinos to spend and be merry in December 2022.
The increasing trend in remittances is expected to continue as high inflation would prompt millions of Overseas Filipino Workers (OFWS) to send more to their families in the Philippines to help them cope with rising prices.
However, Ricafort said risks or headwinds such as higher prices in host countries for OFWS could potentially reduce OFWS’ disposable income and limit the country’s remittance inflows this year.
Executive Director Jeremaiah M. Opiniano of the Institute for Migration and Development Issues (IMDI) agreed with this and said major economies of the world will experience a recession this year which could make life harder for OFWS abroad.
“Filipinos abroad and the Philippine government must brace themselves for possibly lower levels of cash remittances once again. Bracing for these developments also means not forcing Filipinos abroad ‘to again save the day’ at the risk of their overall welfare,” Opiniano told Businessmirror in an email.
Opiniano said it is hoped that new ways of making remittances work for Philippine development will be crafted by the government. He said the sector is awaiting the Department of Migrant Workers launch of “a rejigged OFW reintegration program.”
He added that recent developments such as remittances being used to open small and medium enterprises (SMES) could create new avenues for the use of remittances as well as savings and financial investment products for OFWS.
Opiniano said more digital finance platforms and not just remittance channels that direct Filipinos abroad to varied investible schemes could also be created as well as greater involvement from rural banks, cooperatives and microfinance institutions across the country.
Remittances
THE BSP said the growth in cash remittances in 2022 was driven
by inflows from the United States, Saudi Arabia, Singapore, Qatar, and the United Kingdom.
In terms of country sources, the US posted the highest share of overall remittances in 2022, followed by Singapore and Saudi Arabia.
In December, BSP said the growth was driven mainly by receipts from land- and sea-based workers.
Meanwhile, the data also showed that personal remittances from Overseas Filipinos, which included non-cash remittances, reached an all-time high of $36.14 billion. This level was 3.6 percent higher than the $34.88 billion remittance flows in 2021.
“The robust inward remittances reflected the increasing demand for foreign workers amid the reopening of economies. The full-year 2022 level accounted for 8.9 percent and 8.4 percent of the country’s Gross Domestic Product [GDP] and Gross National Income [GNI], respectively,” BSP said.
In December, personal remittances recorded a high of $3.49 billion, a 5.7-percent increase from the $3.3 billion posted in December 2021.
The BSP said the increase in personal remittances in December 2022 was due to higher remittances sent by land-based workers with work contracts of one year or more and sea- and land-based workers with work contracts of less than one year.