Growth in OFW remittances slowed to 5.6% in February

Growth in remittances from migrant workers slowed to an 11-month low in February despite the sustained demand for Filipino labor in developed countries, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday.

Although the Philippines remained on track to meeting the government’s forecast for growth in money transfers for the year, remittances in February were down from January. This was the first month-on-month decline in February remittances since 2008.

Cash remittances in February reached $1.79 billion, up 5.6 percent year-on-year. This was slower than the growth in January of 5.9 percent. It was also the slowest growth since the 4.2 percent in March 2013.

The BSP remained optimistic, noting that demand for skilled Filipino labor abroad—a major driver for remittances—remained strong. The BSP added that the increase in remittance outlets around the world made it easier for migrants to send money back home.

“The continued demand for skilled overseas Filipino workers contributed partly to the steady flow of remittances,” the BSP said in a statement.

Year-to-date, remittances were up 5.8 percent. The government expects remittances to grow by 5 percent this year, slowing from last year’s 7.4 percent.

Major sources of remittances were the United States, Saudi Arabia, United Arab Emirates, United Kingdom, Singapore, Japan and Canada. The BSP noted that remittance figures from these countries might be artificially inflated due to the common practice of coursing transfers from other markets to banks and remittance centers in major economies.

The BSP likewise noted that remittances sent through money couriers could not be disaggregated by actual country of source. Money sent through these channels are usually lodged as coming from where the main offices of these couriers are.

Remittances from overseas Filipino workers (OFWs) accounted for 8.6 percent of the country’s gross domestic product (GDP) in 2013. These inflows are also seen as fuel for domestic consumption, which accounts for two thirds of GDP.

These cash transfers are also a major component in the current account, which refers to the stream of recurring foreign exchange income for the Philippine economy.  Paolo G. Montecillo