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Money transfers by migrants rose faster than expected in January amid strong demand for Filipino labor and as workers sent home more cash to fund the reconstruction of areas affected by Supertyphoon “Yolanda.”
The Bangko Sentral ng Pilipinas (BSP) on Monday also reported revisions in the 2013 remittance numbers, which now showed that cash transfers rose by 7.4 percent, better than the 6.4 percent previously reported.
“Remittance flows from overseas Filipinos remained resilient, underpinned by the sustained demand for Filipino manpower overseas, particularly the skilled workers,” the BSP said in a statement.
“The solid growth of remittances is expected to provide support to the continued strength of the current account,” it added.
The current account refers to the money earned by the country from remittances, and trade of goods and services with other nations, among others.
Remittances are the country’s single-biggest source of foreign exchange income, which supports the strength of the peso by ensuring the healthy supply of dollars in the economy that businesses and the government can use for their foreign-denominated expenses.
Last year, remittances accounted for 8.4 percent of the country’s gross domestic product (GDP).
For January alone, remittances reached $1.8 billion, rising by 5.9 percent over the same period last year. Revised numbers for last year showed remittances in December rose 10 percent to $2.17 billion.
“It should be pointed out that the level of remittances typically drops after the yearend holiday season,” the BSP said, explaining the lower inflows in January compared to December.
Cash remittances came mainly from the United States, Saudi Arabia, United Arab Emirates, United Kingdom, Singapore, Japan and Canada.
The BSP also noted the continued expansion of banks and non-bank remittance service providers in foreign markets. This has allowed companies to increase their market coverage, making it easier for migrant workers to send money back to the Philippines.
The BSP expects remittances to grow by 5 percent this year, helping support consumer spending that makes up more than two-thirds of domestic output.