Remittances hit $28.5 B in 2015

RECORD $2.7-B LEVEL IN DECEMBER

Proving resiliency, money sent home by Filipinos abroad hit a record high in December, growing faster than target last year amid concerns of potential lay-offs in the Middle East because of low oil prices.

Personal remittances from overseas Filipinos amounted to $2.7 billion in December 2015, a 4.9 percent growth year-on-year and the highest monthly level recorded thus far.

Consequently, full- year personal remittances reached $28.5 billion, 4.4 percent higher than the previous year’s level and exceeding the Bangko Sentral ng Pilipinas’ projection of four percent for 2015.

Personal remittances represent the sum of net compensation of employees (i.e., gross earnings of OFWs with work contracts of less than one year, including all sea-based workers, less taxes, social contributions, and transportation and travel expenditures in their host countries), personal transfers (i.e., all current transfers in cash or in kind with work contracts of one year or more as well as other household-to-household transfers between Filipinos who have migrated abroad and their families in the Philippines), and capital transfers between households (i.e., the provision of resources for capital purposes, such as for construction of residential houses,

between resident and non-resident households without anything of economic value being supplied in return).

Cash remittances coursed through banks totalled $2.47 billion in December, up 4.9 percent from last year’s $2.35 billion, the BSP added.

This brought last year’s total tally to $25.77 billion, an increase of 4.6 percent which was also faster than the central bank’s revised forecast of four percent.

“The continued deployment of skilled overseas Filipino workers remained a key factor to the growth in remittance inflows,” BSP Governor Amando Tetangco Jr. said.

A total of 1.8 million overseas Filipino workers were deployed last year, the central bank said, citing data from the Philippine Overseas Employment Administration (POEA).

Additionally, there were 835,247 job orders which POEA approved last year, 45 percent of which were already processed and are steps away for deployment.

Interestingly, three of the five countries with most job orders were from the Middle East namely Saudi Arabia, Qatar, Kuwait. Taiwan and Hong Kong were the other two.The Aquino administration is readying mitigation and response measures to potential labor retrenchments in the oil-rich Middle East amid plunging prices of oil.

“So far because of the Middle East governments have very deep pockets they’ve been able to put off lay-offs, said Emilio Neri Jr., lead economist at the Bank of the Philippine Islands.

“But our concern is whether this can be sustained in the long-term basis and if it will persist, how the cash flows of these governments can be negatively affected,” Neri said.

To an extent, Neri said the “protracted” decline in oil prices is “somewhat unique” when compared with previous threats to OFWs such as the global financial crisis and geopolitical concerns.

Around two million Filipinos are living and working in the Middle East, according to data from the Commission on Filipinos Overseas.

But Neri said the US accounts for the bulk of remittances. Detailed BSP figures on remittances per territory were unavailable as of press time.