OFW remittances post strong growth in August
Remittances of foreign currency by expatriate Filipinos continued to rise in August, thanks to sustained inflows from workers with both long- and short-term employment contracts, the Bangko Sentral Ng Pilipinas reported yesterday.
In a statement, the BSP said personal remittances of overseas Filipinos continued to grow in the eighth month of this year, expanding by 9.4 percent from the same period last year year to reach $2.8 billion.
This brought personal remittances for the first eight months of 2017 to $20.7 billion, higher by 6.4 percent from a year ago.
“The increase in personal remittances was driven largely by the sustained inflow of transfers from land-based workers with work contracts of one year or more at $16 billion and remittances from sea-based and land-based workers with work contracts of less than one year at $4.2 billion,” the central bank said.
Personal remittances represent the sum of net compensation of employees (for example, gross earnings of overseas Filipino workers 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 (like all current transfers in cash or in kind by OFWs 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 (for example, the provision of resources for capital formation purposes such as for construction of residential houses between resident and nonresident households without anything of economic value being supplied in return).
Meanwhile, cash remittances from overseas Filipinos coursed through banks rose by 7.8 percent to $2.5 billion in August 2017. By country source, the primary contributors to the rise in cash remittances during the month were the United Arab Emirates (UAE), United States, Singapore and Qatar.
For the first eight months of 2017, cash remittances reached $18.6 billion, up by 5.4 percent from the level registered in the same period last year.
The sustained influx of remittances was observed from both land-based workers ($14.7 billion) and sea-based workers ($3.9 billion), which grew by 6 percent and 3.2 percent, respectively.
The bulk of cash remittances (82.5 percent of total cash remittances in the first eight months of 2017) came from the United States, Saudi Arabia, UAE, Singapore, Japan, United Kingdom, Qatar, Kuwait, Germany and Hong Kong.
The BSP explained, however, that a common practice of remittance centers in various cities abroad was to course remittances through correspondent banks, most of which are located in the US. At the same time, remittances coursed through money couriers cannot be disaggregated by actual country source and are lodged under the country where the main offices are located, which, in many cases, is in the US. Therefore, the US will show up to be the main source of remittances because banks attribute the origin of funds to the most immediate source.
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