Dollar inflows from Filipinos abroad increased for the seventh straight month in August, with host countries further opening up as the global economy gradually recovers from the pandemic, the Bangko Sentral ng Pilipinas (BSP) said.
Based on BSP data, personal remittances went up by 4.8 percent to $2.89 billion in August from $2.76 billion in the same month last year.
Personal remittances include all current transfers in cash or in kind by overseas Filipino workers (OFWs) as well as other household-to-household transfers between Filipinos who have migrated abroad and their families in the Philippines.
The BSP attributed the increase in personal remittances in August to the 4.2 percent rise in remittances sent by land-based workers with contracts of more than one year, to $2.21 billion from $2.12 billion a year ago, as well as the 8.4 percent rise in the amount sent home by sea and land-based workers with short-term contracts, to $629 million from $580 million.
From January to August, the central bank said personal remittances grew by 5.9 percent to $22.67 billion from $21.41 billion in the same period last year.
Likewise, cash remittances coursed through banks grew by 5.1 percent to $2.61 billion in August from $2.48 billion in the same month last year.
Cash remittances from land-based workers rose by 4.1 percent to $2.03 billion from $1.95 billion, while that of sea-based workers increased by 8.6 percent to $577 million from $531 million.
As a result, cash remittances went up by 5.7 percent to $20.38 billion from January to August compared to last year’s $19.28 billion.
“The growth in cash remittances from the US, Malaysia and South Korea contributed largely to the increase in remittances from January to August,’’ the BSP said.
It also said the US registered the highest share of overall remittances at 40.7 percent during the period, followed by Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, South Korea, Qatar and Taiwan. These countries accounted for 78.8 percent of total cash remittances.
Both personal and cash remittances have been recording growth after contracting by 1.7 percent in January.
“Remittances have proven to be pandemic-proof and as such, we expect it to be one of the indicators to recover fast this year and next. Inflows will help prop up the household expenditure side for the holiday season and support a nascent recovery,” Security Bank chief economist Robert Dan Roces said.
UnionBank chief economist Ruben Carlo Asuncion said the increase in OFW remittances in August was stronger than the bank’s projection of 4.9 percent.
“We may see some surprises as seasonal inflows in the coming months may be higher than initially expected. This expectation fits into our view that these inflows will underpin a strong peso narrative, ready to counter dollar strength due to a more hawkish US Federal Reserve and downward pressures from higher global oil prices,” Asuncion said.
The Aboitiz-led bank sees remittances growing by 4.5 percent this year.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the continued recovery of remittances in the coming months would largely depend on the faster recovery of the economies of major host countries from COVID lockdowns.
Ricafort said the country’s remittances from overseas workers have consistently been the fourth largest in the world after India, China and Mexico, a sign of resilience despite the pandemic.
“Over the years, deployment of OFWs has also been diversified to include more countries worldwide, especially those outside the traditionally biggest host countries,” Ricafort said, adding that the Philippines has been among the world’s biggest suppliers of nurses and seafarers.
The BSP now expects remittances to grow by six percent this year amid the continued reopening of the global economy from strict COVID lockdowns.