MANILA, Philippines—The amount of dollars sent home by expatriate Filipinos rose in February, largely from an increase in remittances by land-based workers with long term contracts abroad, according to the Bangko Sentral ng Pilipinas (BSP) on Thursday (April 15).
The latest number exceeded by more than double the expectations of economists and market watchers, many of whom had expected the continuing pandemic to weigh down on the overseas job market which provides the country with foreign exchange that’s responsible for one-tenth of economic activity.
In a statement, the BSP said personal remittances from overseas Filipinos amounted to $2.761 billion in February 2021, higher by 5.3 percent than the $2.623 billion recorded in February 2020.
“The increase in personal remittances was attributed to the 7.8 percent growth in remittances from land-based workers with work contracts of one year or more to $2.152 billion from the $1.997 billion recorded in February 2020,” the regulator said.
Remittances from sea-based workers and land-based workers with work contracts of less than one year declined by 4.6 percent to $540 million from $566 million in 2020.
“We can expect remittance flows to remain positive in the coming months,” said Nicholas Mapa, ING Bank Manila senior economist, in an email to media.
He explained, however, that upside gains for remittances may be limited given the substantial drawdown in the stock of overseas Filipinos due to repatriation and recent shutdowns in their host countries.
Nonetheless, Mapa said expectations for modest positive growth for remittances will continue to be supportive of the peso’s value over the near term, especially with the economic recession weighing down on corporate demand for the dollar.
“In 2021, we expect remittance flows to adequately cover the more modest trade deficit, a development that should help lend appreciation pressure to the peso in the near term,” he said.
On a cumulative basis, remittances for the first two months of 2021 reached $5.655 billion, representing a 1.6 percent growth year-on-year from the $5.566 billion recorded in the comparable period in 2020. This was despite the slack in remittances recorded in January 2021.
Likewise, cash remittances from expatriate Filipinos coursed through banks rose by 5.1 percent to $2.477 billion in February 2021 from $2.358 billion in the comparable month a year ago.
In particular, cash remittances from land-based workers increased by 7.8 percent to $1.982 billion, while that of sea-based workers decreased by 4.6 percent to $495 million.
For the first two months of 2021, cash remittances amounted to $5.08 billion, an increase of 1.5 percent from $5 billion in the same period in 2020.
The growth in cash remittances for the first two months of 2021 emanated mainly from the United States, Malaysia, and Singapore. In terms of country sources, the US registered the highest share in overall remittances with 41 percent for the first two months, followed by Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, Malaysia, Taiwan and Qatar. Combined remittances from these countries accounted for 78.3 percent of total remittances.