Philippine Daily Inquirer
Dollars sent home by Filipino expats post surprise increase
Dollars sent home by expatriate Filipinos rose in February, thanks to an increase in remittances from land-based workers with longterm contracts abroad, according to the central bank on Thursday.
The latest number exceeded by more than double the expectations of economists and market watchers, many of whom had expected the continuing pandemic to weigh on the overseas job market which provided the country with foreign exchange that was responsible for a tenth of economic activity.
In a statement, the Bangko Sentral ng Pilipinas said personal remittances from overseas Filipinos amounted to $2.761 billion in February 2021, higher by 5.3 percent than the $2.623 billion recorded in February 2020.
“The increase in personal remittances was attributed to the 7.8 percent growth in remittances from land-based workers with work contracts of one year or more to $2.152 billion from the $1.997 billion recorded in February 2020,” the regulator said.
Remittances from sea-based workers and land-based workers with work contracts of less than one year fell by 4.6 percent to $540 million from $566 million a year ago.
“We can expect remittance flows to remain positive in the coming months,” ING Bank Manila senior economist Nicholas Mapa said in an email to the press.
To remain positive
He, however, said upside gains in remittances might be limited given the substantial drawdown in the stock of overseas Filipinos due to repatriation and recent shutdowns in certain countries around the world.
Nonetheless, Mapa said expectations for modest positive growth in remittances would continue to be supportive of the peso’s value over the near term, especially with the economic recession weighing on corporate demand for the dollar.
“In 2021, we expect remittance flows to adequately cover the more modest trade deficit, a development that should help lend appreciation pressure to the peso in the near term,” he said.
On a cumulative basis, remittances for the first two months of the year reached $5.655 billion, representing a 1.6-percent growth year-on-year from the $5.566 billion recorded in the same period in 2020, despite the slack in remittances recorded in January 2021.
Likewise, cash remittances from expatriate Filipinos coursed through banks rose by 5.1 percent to $2.477 billion in February 2021 from $2.358 billion a year ago.
In particular, cash remittances from land-based workers increased by 7.8 percent to $1.982 billion, while that of sea-based workers decreased by 4.6 percent to $495 million.
For the first two months of 2021, cash remittances amounted to $5.08 billion, an increase of 1.5 percent from $5 billion in the same period last year.
The growth in cash remittances in the first two months came mainly from the United States, Malaysia and Singapore. In terms of country sources, the United States registered the highest share to overall remittances at 41 percent for the first two months.