Money sent home by overseas Filipino workers (OFW) rose at a stable pace in May, providing much-needed support for the country’s stuttering economy.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said global demand for Filipino talent stayed strong despite weak conditions in several emerging markets. Local banks also continued to expand their international reach, making it easier for migrants to send money back home.
“Remittances remained resilient on the back of sustained demand for skilled Filipino manpower overseas,” the BSP said Wednesday.
For May, remittances rose by 5.8 percent to $2.1 billion, accelerating slightly from April’s expansion of 5.1 percent. With May’s result, the country is still on track to meeting the full-year forecast by the central bank of a 5-percent increase in remittances.
Between 10 million and 12 million Filipinos work abroad, making the Philippines one of the world’s top labor exporters. The country is the third-biggest recipient of cross-border cash transfers behind India and China.
Remittances from OFWs reached the equivalent of 8.5 percent of gross domestic product (GDP) in 2014. These cash transfers are seen as a strong driver for consumer spending that makes up two-thirds of domestic output.
It also forms the biggest component of the economy’s current-account surplus, or a summary of all recurring forms of foreign exchange income for the country. This surplus ensures the steady supply of dollars in the economy to cover the money needed to pay for imports.
Major sources of remittances in May were the United States, Saudi Arabia, United Arab Emirates, Singapore, Japan, Hong Kong and Canada.