Remittances hit 3-month high of $2.47B in June

Filipinos working and living abroad sent more money home in June, a three-month high of $2.47 billion, partly as the peso slid to nearly 11-year lows and in time for the opening of classes that month.

Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. also attributed the 5.7-percent increase in cash remittances last June from $2.33 billion a year ago to the continued deployment of overseas Filipino workers.

“The sustained increase in overseas Filipinos’ remittances was supported by stable demand for skilled Filipinos abroad. Preliminary data from the Philippine Overseas Employment Administration showed that for the period January to June 2017, the total number of deployed OFWs reached 1,140,226, which is already more than 50 percent of the total number of OFWs deployed for the year 2016 at 2,112,331,” Espenilla said in a statement.

The latest BSP data showed that the year-on-year increase in remittances coursed through banks in June was also the fastest in three months as well as higher than the 4.8-percent jump in the same month last year.

The peso further weakened toward the end of June, breaching the 50:$1 level that was last seen in August and September 2011.

In June, cash remittances from land- and sea-based workers both grew 3.8 percent and 13.3 percent year-on-year to $1.9 billion and $500 million, respectively.

Hong Kong, Singapore, the United States and the United Arab Emirates were the top contributors to remittance growth in June, the BSP said.

From January to June, remittances totaled $13.81 billion, up 4.7 percent from $13.19 billion a year ago.

The growth in cash remittances at the end of the first half was likewise the fastest in three months and exceeded the 4.5-percent increase in the same six-month period last year.

The BSP said nearly four-fifths of end-June total remittances were from Germany, Hong Kong, Japan, Kuwait, Qatar, Saudi Arabia, Singapore, the UAE, the United Kingdom and the US.

Cash remittances were expected to hit a record $28 billion by year’s end.

The BSP has maintained the 4-percent remittances growth target for 2017, although the value of the updated projection made in June was higher than the earlier forecast of $27.7 billion.

In 2016, cash sent home by overseas Filipinos through banks reached a record $26.9 billion, up 5 percent from 2015’s $25.6 billion.

Remittances are the country’s biggest source of foreign exchange income, insulating the domestic economy from external shocks by ensuring the steady supply of dollars in the system.

Also, these cash transfers are a major driver for domestic consumption, hence contributing to strong economic growth.