Cash sent home by overseas Filipino workers (OFWs) rose in line with expectations in April this year, which became the earliest month in history that saw remittances exceed $2 billion, documents from the central bank showed.
Growth in remittances fell off March’s high but still stayed at a healthy pace, keeping up with the Bangko Sentral ng Pilipinas’ (BSP) official forecast for 2015.
“The steady demand for skilled Filipino manpower provided support to the continued growth in remittance inflows,” the BSP said in a statement Monday.
In April, remittances grew by 5.1 percent year-on-year to $2.01 billion, slowing down from the 11.3-percent expansion recorded a month earlier. The total for the four months stood at $7.81 billion, up 5.4 percent year-on-year.
The BSP expected remittances to grow by 5 percent this year as Filipinos retain their jobs abroad despite weak economic conditions in the developed countries.
Remittance growth slowed to a crawl earlier this year, expanding just 0.5 percent in January. Officials attributed the temporary slowdown to the weakening of the peso, which meant Filipinos received the same amount of money in peso terms despite the fewer dollars sent home by migrants.
Apart from the global demand for OFWs, remittance growth was also supported by local banks’ ever-expanding network of offices, branches and partnerships with foreign companies. This made it easier and cheaper for Filipinos to send money through formal channels.
The United States, Saudi Arabia, United Arab Emirates, United Kingdom, Singapore, Japan, Hong Kong and Canada remained the main sources of cash transfers.
Bulk of the month’s inflows came from land-based OFWs with contracts of more than a year. Longer contracts increase the likelihood that remittance growth would remain stable.
Money sent home by migrants accounted for nearly a tenth of gross domestic product (GDP) in 2014. These cash transfers are the biggest source of dollar income for the Philippines, keeping the peso firm. Remittances are also a main driver of domestic consumption, which benefits industries such as retail and wholesale trade, financial services, food production and real estate.