Remittances grew at fastest pace since ’09
Cash sent home by migrant workers in March grew at its fastest pace since 2009, beating analysts’ projections and recovering from slowdowns
earlier in the year.
Data from the Bangko Sentral ng Pilipinas (BSP) showed remittances from overseas Filipino workers (OFWs) breached the $2-billion mark last March, matching levels previously seen only in the second half of the year.
The BSP attributed the increase to sustained demand for migrant workers as well as the continued expansion of banks overseas, which makes it easier for OFWs to send money home.
“Remittances remained strong partly on account of sustained demand for skilled Filipino manpower overseas,” the BSP said in a statement.
In March, cash remittances reached $2.1 billion, rising 11.3 percent year-on-year. This was the fastest expansion since December 2009 when remittances rose 11.4 percent. Year-to-date, remittances were up 5.5 percent to $5.79 billion.
Leading sources of remittances to the Philippines were the United States, Saudi Arabia, United Arab Emirates, United Kingdom, Singapore, Japan, Hong Kong and Canada.
The increase in March defied a global trend of slowing remittances to emerging markets. Both Standard Chartered and ING projected more moderate remittance growth in March for the Philippines, citing weak economic conditions in areas such as the Middle East, home to a significant portion of the country’s 10 million OFWs.
Meanwhile, the World Bank said in a report last April that the global flow of remittances to developing countries like the Philippines would slow to a trickle in 2015, growing by just 0.9 percent year-on-year to a total of $440 billion.
The 2015 remittance growth rates could be the slowest since the global financial crisis of 2008, the bank said. The Philippines is the third-leading recipient of remittances in the world.
Unlike neighboring countries that rely on earnings from exports for foreign exchange revenues, the Philippines counts remittances from OFWs as the biggest source of dollar income for the economy. This ensures a steady supply of foreign exchange, which the government and local companies need to do business with the rest of the world.
A shortage of dollars, known as a balance of payments (BOP) crisis, will force the country to buy foreign exchange from overseas at higher rates to pay for imported goods or to meet debt obligations.
Last year, about $24 billion in remittances entered the country, fueling the prosperity of industries such as real estate and consumer goods.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.