Cash sent home by the country’s 10 million migrant workers rose to a record high in October, a testament to the durability of these inflows amid difficult global economic conditions.
With demand for overseas Filipino workers (OFWs) staying strong, remittances rose to just shy of $20 billion for the 10 months to October, growing faster than official projections.
“The steady demand for skilled professional Filipino manpower supported the growth in remittance inflows,” the Bangko Sentral ng Pilipinas (BSP), which tracks the flows, said in a statement.
Sending cash back to the Philippines has also become easier for migrants as local banks set up shop in other countries or form partnerships with foreign institutions, helping drive growth in remittances, the BSP said.
For October alone, remittances rose 7 percent to $2.22 billion—the highest level in any single month on record. The previous record was set in December last year when remittances reached $2.17 billion.
This brought remittances to a total of $19.87 billion from the start of the year to the end of October, growing 6.2 percent over 2013 levels. For all of 2014, government forecasts a growth in remittances of 5.5 percent to a record high of $24 billion.
Last year, remittances accounted for about 8 percent of the country’s gross domestic product (GDP).
Coupled with the recent weakening of the peso, rising remittances are expected to lead to higher local consumption, BSP Deputy Governor Diwa C. Guinigundo earlier said. A weaker peso means dollars that come in have a higher peso value, putting more money in people’s hands.
Apart from providing support to domestic consumption, remittances also form more than half of the country’s recurring income from abroad. This ensures the steady supply of foreign currencies in the country that allows local companies and the government to do business with the rest of the world without having to buy from abroad at high rates.
Bulk of cash remittances came from the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, Hong Kong and Canada, the BSP said.